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U.s. 29, United States 21, America 19, Molly 12, Europe 12, Washington 10, Pepfar 9, Florida 8, China 8, Obama 7, Haiti 6, Jan Schakowsky 6, Clinton 6, Facebook 5, Molly Katchpole 4, Jamie Dimon 4, Roger 4, David Pietrusza 4, Marco Rubio 4, Mr. Trotter 3,
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  CSPAN    U.S. Senate    News/Business.  

    June 25, 2012
    8:30 - 12:00pm EDT  

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for the governments to work their way around the defense of what you're giving to the activists? >> guest: yeah. i think generally it's, obviously, a sensitive area, um, and we want the programs to be as effective as possible. they're not covert, you know, they're competed through publicly-advertised contests, and they're extremely competitive. we get an enormous number of really interesting proposals. but out of respect for the grantees, many of whom have people on the ground who are working, we let them decide when and whether they want to disclose that they're receiving support. and we're not the only ones who are supporting them. >> host: and if you would like to read the state department's report, state.gov is the web site. we have been talking on "the communicators" with daniel baer, deputy assistant secretary of state for democracy, human rights and labor. lynn stanton of "telecommunications reports," senior editor, has been our guest reporter. ..
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>> today the u.s. house is in 2 p.m. eastern for a pro forma session. no legislative business is expected. members will consider bills under suspension of the rules that include fiscal year 2013 spending for agriculture and transportation. there's also the possibility of
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a vote this week on a resolution to cite attorney general eric holder for contempt of congress. prevent to provide some documents relating to the fast and furious gun trafficking operation. over in the senate members return today at 2 p.m. eastern. they will resume consideration of bills considering flood insurance and user fees for prescription drugs and medical devices. live gavel to gavel coverage of the house on c-span, and the senate, here on c-span2. >> sunday, award-winning author and historian david pietrusza is our guest on booktv's "in depth." his passion for use presidents and the great american pastime, baseball, has resulted in a dozen books. join us live with her calls, e-mails and suites for david pietrusza sunday at noon eastern
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on booktv's "in depth" on c-span2. >> we welcome you to the governor's mansion. spent the first governor was brown and we have a photograph, of his wife and his child. what is interesting about brown is the fact that his grand daughter, margaret, wrote the book goodnight moon, which, of course, is a very favorite of many of the schoolchildren not only his industry but all over the united states. >> july 7 and a, booktv and american history tv explore the heritage and literary culture of missouri state capitol. jefferson city with c-span's local content vehicles and american history tv inside the governor's mansion. >> it was the governor of the story says he rode his horse up the front steps of the mansion, into the dining room and proceeded to feed his horse bodes out of this plate warmer as part of the sideboard.
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now, the comment was that he probably should not be feeding his horse in the governor's mansion, and is common to them was, i have had to feed more people into some with probably less manners than my horse has. >> watch were booktv and american history tv and jefferson city, missouri, july 7 and 8 on c-span2 and three. >> now, a panel on strategies for more progressive candidate to candidate -- congress and reelected president obama. u.s. democratic representative jan schakowsky along with a representative of the afl-cio, and the codirector of the campaign for america's future, which hosted this for. is a part of a three-day conference called take back the american dream. it runs a little over an hour. >> please welcome the codirector of campaign for america's future, roger hickey. [applause]
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>> all right. i like to bring on our panel, this plenary, jan schakowsky. [applause] molly katchpole from rebuild the dream, and damon silvers from the afl-cio. [applause] >> we are still filling the rooms i want to take a moment to do a shout out to the generational alliance -- jew and all of the young activists that they are brought here to this conference. that campaign -- they have enlivened this congress. they are broadband average age of this conference and they brought us to reality on the ground. we have made a commitment to bringing those people here, but we haven't quite paid for it so i want to make a pledge, a plug, for you to text and use the text information on your tables, text
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41444, and in your message say future. just future or future $30. we will not take any money from your card into you confirm what you would like to give us. but this would really, really help to pay for the young people who are here at this conference. let's hear for the generational alliance and all those groups they represent. [applause] >> okay. [inaudible] >> text 41444 and put in future. it's right there on everybody stable. so, brothers and sisters, i'm a little like reverend joel osteen -- you've seen them on tv -- i would like to start with something funny. so, have you heard that mitt romney is running for president on a plan to create jobs? the man from maine capital, let me get something very, very clear, with 12.5 million
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americans still out of work and the middle-class shrinking, the economic policy of conservatives, of the tea party, the chamber of commerce, the republican party and mitt romney is a new wave of painful and destructive economic austerity. they want to do to america what angela merkel and david cameron are doing to europe. they want to slash public investment and everything from teachers and cops to medicare to roads and bridges. they are imposing austerity right now on u.s. by demanding spending cuts and opposing every single plan to create jobs. and after the election, as we heard this morning, whether they win or lose, the right-wingers are setting up yet another blackmail situation, by which they will threaten to throw the u.s. economy all for the fiscal cliff unless they get what they
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want to what do they want? they want the extension of the bush tax cuts for the wealthy. they want deep cuts in public spending, including medicare, medicaid, social security, education. but not for the military contractors. and on top of all this they want more tax cuts for the top 1%, and for the corporations. now, as we have heard this morning, the conservative train wreck in the summer, avoiding that conservative train wreck, requires that we were to win a progressive majority in congress this fall. and our first speaker in this plenary knows how to win. before she won a state in the illinois assembly and then in the u.s. congress, jan schakowsky was one of us. she's an activist, winning victories then and now for consumers and seniors and women. and she kept on being an activist in congress are as a
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member of the simpson-bowles commission, she wrote up a progressive alternative to that unpopular deficit plan, and she advanced a clear plan for funding public needs through economic growth, not austerity, and through progressive taxation. and working with all of us, she put forward real solutions. now, jan schakowsky also knows how to talk with americans about the economic devastation that conservative policies are imposing on working families. we asked are here today to talk about how we can take a commonsense program to create jobs, protect social security and medicare, and to create an economic future for young people, and how we can win a new congressional majority that will prevent the conservatives from having the power to throw our country over the cliff in the
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summer. so please give a big, big welcome to our progressive champion, jan schakowsky. [applause] >> thank you. thanks so much, roger. and thank you, and robert borosage, for organizing once again this diverse event. i think i've been to every one of the conferences, take back america conference is. yesterday my son showed me, i hadn't seen jon stewart, the hysterical did he get about the senate hearings with jamie dimon. if you haven't seen it, you've got to google it. it is just priceless. but one of the things that he shows is jim demint talking to jamie dimon, he was saying that
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you know, i really can't chastise you for losing $2 billion, because here in washington we lose twice that much every single day. and so then comes back to jon stewart and he says, doesn't senator demint, doesn't senator demint really think that spending money is just the same as losing money? and then he mocks demand, and he says, yesterday, this is supposedly commit, yesterday i had $4 million now all i see is a freaking highway. where's my money? where's my money? that i think so clearly describes what, first of all, the sense that somehow it isn't the people's money, whatsoever. and this idea that spending is really a way of losing money in this country.
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two visions, two paths. that's what the president is talking about. and i want to kill you that i am proud once again to be a co-chair of the president's reelection campaign. i have known barack obama, i am from chicago, for the last 17 years. and he's talking about investments in education and energy and innovation and infrastructure, and doing fair tax reform. and this is the republican plan for job creation. more tax cuts for the rich, more he regulation everything, particularly like the environmental protection agency, repealing obamacare. i say that. i think we should all embrace the term obamacare. it's great, obamacare. we love obamacare. and repealing dodd-frank. the republicans now have gone from just rooting against the economy to outright sabotage of the economy. if the transportation bill, which has always been a part
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partisan bill, is not passed, far from creating jobs, this could cost 1.9 million construction jobs. we'll already well into the construction season. they will not pass the bill. john boehner threatened once again a debt ceiling fight not to raise the debt ceiling, which the last time helped plummet our economy even further and put our credit rating, diminished. so they're doing these direct sabotage efforts, but not passing the american jobs act or a piece of legislation that i had that we know would create 2 million jobs, because we would just hire people to do the jobs that we need to do in our country. so here's the truth. that during the obama administration, 4.3 million jobs have been created. now i know we had a bad week
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when they were talking about only 69,000 jobs that were created. just want to point out that that 69,000 jobs is still 69,000 more jobs that were created during eight years of the bush administration. [applause] okay? and 27 months of straight job -- here's a solution that republicans offered. austerity. we know how well that worked. roger pointed out how well that worked in europe. and it is increasing now talk, not just among republicans, but democrats as well, about the bold simpson plan, or as i like to call the ds plan. -- ds plan. roger is right. i offered my own alternative because i just want to make sure that everyone is clear about
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what bowles-simpson we did because i do not think people really understand what is in it. among other things, bowles-simpson raise the retirement age for social security from 67 to 69. it got benefit our current social security retirees because it changes the way the cost of living adjustment is calculated. it increases the cost of medicare, increases cost-shari cost-sharing, she is about 110 billion in costs to seniors and persons with disabilities. it would undermine employer-sponsored health insurance, as it cuts the tax expenditures, all these tax breaks. one of the things it would do is to take a close look at how we can take this tax deduction for employer provided health care and diminished that.
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it is a two-thirds of spending cuts and only one-third increases in revenue. many of those increases in a bad way for middle-class people and for poor people. and so in many ways if people really look at bowles-simpson, this is more of the same, an attack on middle income people and those who aspire to it. so what are the good solutions? let me give you an example of how we win, not just elections, but how we went on our issues. last week, the president announced that those dream kids, the dreamers would no longer be under the threat of deportation, and they could get work permits. [applause] now, i believe that the president always thought, and i know that the president always thought, that the dream act was a good idea in changing our
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immigration law was a good idea. certainly did that as a center, but certainly else that day after day the dreamers were out there organizing and pushing and putting out a tremendous message, and mobilizing around this issue. mobilizing really works. we see the results. so progress is cannot be reluctant. we have to lead the way. women, is there any reason why any woman with any sense would vote for a republican? but we need to get the word out. [applause] and it's not just this tremendous assault on our health care and our bodies, but every single republican voted against the paycheck fairness act in the senate. to our economic security is at risk, and that includes social security and medicare. so organizations like the
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national committee to protect social security and medicare. the alliance for retired americans, social security works. the older women's act. we have everything in this room to make sure that, that women and planned parenthood and all those groups that work on our reproductive rights are out there mobilizing with their help your we can make sure that the women's vote and the gap, the gender gap grows even more and more. so there is a war on seniors. there's a war on poor people. there's a war on unions. there's a war on our environment that we need to mobilize to protect. so we need to organize, just relentlessly we need to organize for november 6, and then we need to be ready for november 7. and if anybody is under the illusion that if we don't
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organize for november 6, that we will be able to make any progress afterwards, if we lose these elections for the house, for the senate or the president, get over it. because we will be once again in a total defensive crouch for the next many years. and it could be generations, because remember the supreme court and those appointments. think of 2010. one half of 18-24 year olds didn't vote in 2010. one half of eligible hispanics did not vote in 2010. single women who tend to vote democratic did not come out to vote in 2010, and seniors, we lost by 21 points. eight points in 2008 we lost them. 21 points in 2010. we cannot win the election without older voters.
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we did not so much lose in 2010 to the tea party as, they didn't so much when as we lost. because our people were not mobilized and did not come out to vote. so our progressive vision cannot grow. romney republican economic slow. economic happen if we are smart enough and willing enough to make sure that every single day we focus like a laser beam on november 6. between now and then the republicans are going to do everything they can in congress to make sure we can't pass anything that's going to help the economy. it's all about winning on november 6. the house, we only need 25 seats, a net up 25 seats. we can do this. that we keep the senate. and then, by the way, on the first day of the senate we've got to push to change the rules
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to get rid of that destructive filibuster rule of la. [applause] harry reid has said he is for the. if there are any illusions the republicans would maintain that, they would do that if they have the chance we have a now, we need to do it. so we can win, my friends. all the elements for victory come all the organizations and the leadership that it takes are in, is in this room right now. so we've got a lot of work to do, and we can be victorious. thank you. [applause] >> now call our next speaker is molly katchpole from rebuild the dream. [applause]
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>> young people are really feeling the brunt of our economic austerity policies. nobody has felt it worse than in people coming out of high school and college is right now. youth unemployment is over 16%, which means even those kids lucky enough to have a job, earn low wages, they have few prospects for promotion, and most stagger, i don't have to tell you this, most stagger under the weight of massive debts which make a close to impossible to buy a house or start a family or move this economy. young people on the occupied brigade and barricades know the priorities of wall street have ripped off their generation that time and they are discovering the conservative austerity is a dagger aimed at their futures, including their social security, they're medicare, their health care as they get older.
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so now we're going to hear from molly katchpole, a 23 year-old activist from rhode island, who last year took on bank of america's $5 a month debit card be using an online institution, and she won. [applause] in only five weeks she won. you probably remember time magazines 2011 person of the year cover story. it was called the protester. well, that was us, and molly was profiled in the issue. molly is now on the campaigns team in rebuild the dream or she primarily focuses on student loan debt. please give a big welcome to molly katchpole. [applause] >> so, i am very solidly shaped
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and grounded by the experiences of my family. my dad would wake up at 4:00 in the morning and make his 45 minute drive to the plant that he worked at in massachusetts. he's a machinist. he's worked in this plant for 30 years, and he doesn't love it but it is his job. and that's what matters to him, he has a job and he is secure. i remember him coming home in the afternoon with his palestinians that were streaked with greece. he wore a thick carhart overhauls with blue collar shirt with this name patches sewn in, jim. and he would stay at home and take care of me in the afternoon. while my mom left to attend night classes to get her associates degree. you on should get her massage therapy certification, and she instilled in me a deep predisposition to view the world. my sister, 10 years older than me and wore combat boots. our friends had pink mohawks.
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i loved her and i wanted to be just like her. when i was very, very young i knew she was gay, and i loved her. so that i loved all gay people. why shouldn't i? i experienced shared values and love, interconnectedness, respect, empathy, values of human dignity. and this has shaped me, and this has shaped my work, and i approach my work with this understanding. and this is the power of the left, and that we need to reclaim and continue to strive for. a love, a caring, and a respect for everyone. [applause] now, we all come from different places and we have different stories, but i believe that there are overarching shared experiences within my generation. and there is one certainty. we are undergoing a major cultural shift in our generation, my generation, is
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fundamentally different than the generations before us. we will be one-third of the electorate in 2016, 80 million strong. this is the reality that we live in. we are graduating college massively in debt. we have $1 trillion issue. and why is this? tuition fees have doubled while the median income has risen only 2.1% over that same time span. that has tripled in 10 years. and university graduates aged trento, almost 10% are unemployed and almost 20% are underemployed. [inaudible] >> it's not. and these numbers also in no way reflects the racial disparities that exist and continue. we have little hope for a secure retirement. and the very future of our
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planet is at risk. i'm going to discuss a couple points are, how they relate to the budget battle and austerity. so the budget out debate we are having come are rather however the senate is having a, completely under represents or exclude young people of every race, socioeconomic status, religion, education level and sexual orientation. and we need to completely readjust the way we talk about and enact and engage in politics by identifying, correcting and catching up with this cultural shift and experience of young people. so like i said, the budget debate as we're having it excludes and under represents young people. and as i said, this isa giant mistake because we will make up one-third of the electorate in 2016. we are disengaged and disconnected because politicians do not accurately represent that. and when leaders talk about what really matters, not just sound clips, their think about how young people are thinking about and experiencing what really
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matters. leaders are thinking and talking about the economy and not talking to those groups. to my generation commentary. and how can you win the median age of a senator is 62, a representative is 55? the average temporary center is 10 years and represented is 11 to in our current congress on a% are often americans, 6% are latino, 3% are asian or native hawaiian or other islander and sister, and there is one native american member of congress. when i was looking at this assistance i also looked at a list of occupations -- held in congress. i was wondering where are the green-collar workers, where are the electricians, where are the software developers, police officers, environmental scientists, artists, organic farmers, nurses, where is america?
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[applause] so at its core what is the budget battle debate? what is austerity? where do we fit in? because let's be real. people like my parents and physical therapist assistant and a machinist don't use that phrase. i don't use that phrase. we don't use it because that's not actually what we're talking about about, is it? rather than getting bogged down by terminology but as it turns out people are not actually using, let's refrain and boil it down to what it actually is. it's too fundamental belief systems. it's the belief that when we spend where we are irresponsible and shortsighted, and then it's in the belief that the government has an important role to play by investing in our people who in turn allow us to innovate and grow. and to distill that even further, it's what my parents taught me. its values, its individualism,
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pull your self up by your bootstraps mentality versus what's good for my neighbor is good for me. so it's a set of values, it's how we think and informs the decisions that will make and how we live our lives and where we live. we're going to lose that if we continue playing on the right field by only playing defensively rather than going on the offensive. we must lay out a vision for the future and prove why we need to spend them why it's important to fund innovation and what we're going to get out of it. we need to continue to allow ourselves to engage in in framing, rather than in taking and policy debates. and we need to completelycome ahead and own the way that we see the world and that we can truly fix it. and young people aren't going to be engaged. one-third of the electorate. so this cultural shift that i mentioned, what is it and how does it relate to this we framing? i'm not going to say anything groundbreaking here, but it
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surprises me that this is so seldom named and acknowledged when talking about politics. this is the world as it is an this is how we are. young people are infinitely more connected than previous generations. we communicate different than older people to the of the percentage of internet users who are on twitter, 20% are black and 26% are between ages 18 and 29. we grew up with shows like south park and the simpson, called the report, "the daily show." and you can't stop that stuff. it's who we are. ironic, suggested, skeptics, we the, funny, and very, very limited. and more importantly, we understand the role that corporations play in politics. and it isn't fooling us. websites like open secrets.org allows us to see exactly who donates to which politicians and we are not happy about it.
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my generation is completely different. we use things like zipcar, to envision a new economy that is built on sharing and resources. we use things less permanent. we're not afraid of change. indeed, we welcome it. we are adaptive. we think about the future. we think about what makes us happy. we do not want our jobs to define our lives, mike my debt ski. we want our lives to define our job. an example of that -- i realize that not every young person will have this privilege, but my sister and her partner decided to leave their job a couple years ago to travel for three months in southeast asia, for the experience. and my dad, remember, he's been at the same plant for 30 years, he couldn't believe it. he didn't understand. he didn't see the value in a. why do your job in this economy, he question. when it is so secure. and as i said i realize that not every young person has the
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privilege to do this but we want to live in a world where everyone can. [applause] so, who is succeeding? i me, my generation like i said we're skeptical of politicians, so what are we doing? we are making change from the outside. occupy wall street and its subgroups like occupy our homes, who aren't waiting for government to pass bills on foreclosures, and they sure as hell aren't waiting -- [inaudible] there's a dream defend is an incredible civil rights group in florida inspired by trayvon martin. [applause] who marched 40 miles who occupied the police station and engage in civil disobedience. there's a dream as an immigrant youth who are not waiting the present to make a sweeping statement but instead march thousands of miles and hung out in his office, and made people listen. there's a u.s. student association organizes on the outside and on the inside. [applause]
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and they engage in policy which is amazing. there's a league of young voters. is young and vegetables who took a bus tour around the country and just sacked out and talk with people. is agreeing jobs moving to its incredible. despite our skepticism and disillusionment. so solutions here, another world is possible. we are envisioning another america, one that actually accurately represents its make a. we need to elect young people to office. our political system isn't broken. we're just not using it correctly. [applause] we need to elect people to office that don't have advanced degrees am elect community college student, elected elementary school teachers, elect machinist like my dad. elect people to office who are not in bed with the banks because i'll to you something, we are damn sick of taking a backseat to bankers. we all need to fight to get money out of politics. [cheers and applause]
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and i think one thing that maybe most important here for my generation is that we need to completely overhaul the way we spend our students -- center students to college. this is part of the cultural shift. education is the right, not a privilege. [applause] and more and more, we are ushered along the path to college, and that is a path to debt. we cannot keep going down that path, and that is our battle. so in that vein we need to work harder to pass some legislation, like not allowing the interest rate to double on subsidized loans in july. [applause] and if policy like this can't be quickly passed, what message is that sending to my generation? that you can't take it seriously enough? that it's perfectly acceptable to let it slip by and later
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until the hours before july 1 when the rates will automatically double backs that you're comfortable with single-handedly holding millions of dollars over the heads of american student because you can't pay for it? why are we -- why are we yelling that congress can't get this done? let's get it done together. let's look at this interest rate fight and setting the stage for the future. it is at the end all be all fixed. it isn't perfect but it's a band-aid. but if we can't pull together and put this first, how am i supposed to trust you? if we can't pull this together, how will we ever win in december? and if you won't stand with me, how can i stand with you? so tomorrow is a national day on the student loan don't double campaign. we are pushing congress to vote at the end of the week. will you commit to making this phone call tomorrow?
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[applause] so, i can't hear you. will you commit? [cheers and applause] i want, i want everyone to stand up. and i want everyone to turn to the person next to them and say, i commit to stand with you. >> i commit to stand with you. >> i commit. >> i commit. >> and that is how we win. >> and that is how we went. >> thank you. [cheers and applause] >> thank you, molly. all right. [inaudible] >> yeah, molly for president. our next speaker brings the skills of the boardroom to the fight for working families.
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damon silvers is director of policy and special counsel to richard trumka and the afl-cio. he was named, he was named by congressional democrats to the panel that oversaw the t.a.r.p. bank bailout. and from that perspective, damon saw up close how our too big to fail financial system deregulated by the politicians who live in the pockets of the bankers, gambled with our money, brought down our economy, and then demanded that we bail them out to prevent another great depression. damon has been sounding the alarm only about the prospect of another round of austerity, impose by crazy conservatives, willing and able to crash the world economy if they don't get their way.
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so, to share those warnings with us and to tell us what we can do, please welcome the afl-cio is damon silvers. [applause] ♪ ♪ >> all right, great. good afternoon, everybody. first, i have to really, i don't know what roger is going to do to pay me back for having set me up as the person to follow molly. particularly, you know, at my age, dangerous kind of place to be. but boy, you know, i am really heartened and taking nothing away from jan schakowsky, which is one of the great progressive leaders of our country at this time. [applause] i have to say i just feel so much better about our country having just listened to molly. [applause] rogers said a word for richard
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trumka at the afl-cio. it is true. rich is at the g20 meeting trying to put across some of the points that this panel is time to put across to you to the heads of state of the g20. and he sends his deep regret she couldn't be with you. the afl-cio, president trumpeter, we are all in the debt of the campaign for america's future, rebuild the dream, for the vision you put out every day. and rich wannabe to make sure to save it to all of you here. that he was so sore he could not be with you today. now, let me, since sort of, i'm the old guy on the panel, i'm going to talk about the past for a moment. you know, back before "time" magazine profile to molly, "time" magazine did another issue a while ago, 60 years ago, about the american century.
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and in that issue, "time" magazine proclaimed that the 20 century was going to be, or was, the american century. and why was that? it turned out to be kind of true. united states kind of did prosper greatly during the 20th century. why was that true? you could say it's true because of our vast natural resources. you could say it's true because they genius and energy and dynamism of our population, but i want to suggest to you something that is incredibly relevant of what is about to unfold in the next six months. and by that i mean the election, and then the clash over fiscal policy that is going to follow it. what i'm going to suggest to you is this, that 70 years ago when the world faced a similar prolonged economic crisis set off fundamentally by inequality and financial instability, 70 years ago when the problem face the entire world, the united
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states was the only country of any significance that address that crisis head-on by adopting economic policies that did the two things that had to be done. the first was to restructure the deaths of our families. and to say -- the deaths of our families. and for the banks who said they didn't like that, tough on you. the second thing the united states did, th the most importat thing when you do right now is to get people back to work, reinvesting in our country and modernizing our country. we did those two things, and we did them democratically. and by that i don't mean the democratic party to them, although it is to the democratic party did, i mean that we did them through democratic processes. nowhere else in the world did this happen. the other sort of democratic countries of europe pursued
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economic orthodoxy all the way to the economic social and political ruin. to other countries, to invest, to put people to work, but they did it through horrible dictatorship. we did it in a sustainable democratic way. and now we face the same challenge again. and that, that is why we're here today to try to limit what this challenge is about. now, we do not, we do not, were is the slides from your? one is supposed to appear. is it over there? all right. there we go, excellent. so here's where we are. i'm one of these people who hasn't quite a similar technology as my prior speaker has. so here's we are today. and this is critical to understanding this debate about austerity. call it whatever you want to paul krugman says we are in a
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depression. i'm a little nervous about the character ration, but call it whatever you what the global economic crisis continues. europe has been driven into a technical recession, what economists call every session, by austerity policies. economic growth in this country remains weak, from month to month, as a little unfair how weak it is, but it is week. and we are very vulnerable to what's going to happen outside the united states. perhaps most troubling, economic growth in asia is slowing. asia is supposed to be the great engine of the 21st century. if asian growth is slowing without to all be concerned. and, finally, despite what many of us have been promised, global financial system remains very fragile. this was the contribution i think of one of the contributions of our oversight panel over par. just be clear from a?
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interview are giving out your nice, didn't control target. elizabeth warren and i am ayes on the panel, we opined, we have the power of the pen but we didn't control what happened. that was other people. it was very clear to us that what went on with t.a.r.p. did not repair the fundamental systematic problems with our financial system, and we've seen last fall the global financial system under both pressure from europe and from the housing markets in the united states move towards systemic crisis again. and there is, i'm afraid, the real possibility of systemic crisis in the second half of this year. as bad policy choices in europe, and unresolved issues in the united states, combined with slowing growth in asia are measured our financial system again. now, as in the 1930s we are living through an economic
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crisis created, prolonged and intensified by bad policy choices made in the interest of the 1%, or perhaps one-tenth of the 1% or the 1100 of 1%. you probably know all about the first generation of bad policy choices. first generation brought us to the crisis in 2008, financial and labor market deregulation. trade policies and global financial policies that encourage deep and balances between this and parts of the world and the way they treated with each other. wage so pressure, weight passionate wage suppression means government policy designed to keep workers wages down. but now we're in the second generation of bad policy choices. austerity. thinking that the way to do with economic, with, thinking that the way to deal with stagnant economies is to force them to shrink. thinking of the way to do with unemployment is to fire more
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people. austerity. by the way, austerity is exactly what happened in europe that discredited them in the 1930s, that discredited the democratic governments and brought us communism and fascism. secondly, fear to address what has gone wrong in our banking system and the way in which it is tied to housing and to student debt. and thirdly, failing to understand both in the united states and in europe that we live in government and systems of government that are bound together, different nations in europe, different states and cities in the united states, that when these as molly said, to look after each other. that if i'm sitting fat and happy someplace like palo alto -- palo alto is us about how to go but if i'm sitting fat and happy in silicon valley, and down the street they're laying off all the teachers, i might owe some responsibility for that.
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my favorite quote that illustrates what has gone wrong in policy making in this world is from a month ago, that the oecd, the organization for economical operation and development, an organization set up of the developed countries to try to have some kind of -- abridgment of a set up to ensure that the stupidity of austerity in the great depression was not repeated again. but in the 1980s this organization was captured by reagan and thatcher, and now it is a little unclear where it stands but a month ago the chief economist of the oecd education on the state of the world, and he said countries are doing everything right, understand this guy's ideas of right are orthodox the economics. countries are doing everything right and still going off the cliff. now, one of the reasons i like working for richard trumka is used on the panel responded to the and rich said that to mr. pat one, he said if you are
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doing everything, if you think you're doing everything right, you're still going off a cliff, maybe you're not doing everything right. [laughter] [applause] now, i have one graph for you. bad policy choices over a generation produced this truly bizarre outcome, which is at the heart of everything has gone wrong. the blue line on this chart is personal consumption as a percentage of our economy in the united states. you can see that from 1990 to 2010 it keeps going up and up and up. go back to 1980, it moves up a full 10% of gdp, which is a gargantuan number. you would think that it personal consumption was rising as a percentage of gdp, that would mean that people were better off. but actually it is not true. the red line which you see going down is a share of national income that goes to wages.
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we tried for two decades, and actually for three decades going back to 1980, we tried to have a low-wage high consumption economy. and it simply can't be done. and it can't be done part is what we are living through now. now, the result is this vicious cycle. the vicious cycle is what austerity policies in the face of prolonged recession produces. you start off with mass unemployment, falling real wages and falling housing prices. that's kind of where we came in in 2008 and 2000. that was the situation president obama face on the day he was inaugurated. that situation means that consumers, you and i, have less money to spend and to pay taxes with. it naturally produces budget deficits. add on to that the housing crisis that gives financial
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institutions week. the things they have on the books, their loans aren't actually worth what they say they are. week financial institutions don't blend. this is what was referred to in japan in the 1990s as zombie banks. i had a lot of fun on the congressional oversight panel asking tim geithner it secret, bank of america were zombie banks. it's no question in my mind that they are. government austerity policies, meaning cuts in public spending, cut back on public investment. they lay off public workers, teachers, firefighters, park rangers. and they reduced the incomes of the unemployed and the poor. that's how you implement austerity, by doing those things. and when you do those things, unemployment rises, consumer spending falls, housing prices fall with it. people default on their student loans, and back we go to the top
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of the slide. this is what we've been doing for the last couple of years. this is, this is bad policy, and again this is how we got the great depression in the 1930s, and how we stuck with the great depression and most of the world through the 1930s, outside the united states. and in case you didn't think that mass unemployment was serious enough as a problem, let me see just the there are a few other problems that are coming. we seek him and we see in europe but we don't see in europe only, i was just we see it in arizona, two, the rise of the politics of hate. against the backdrop of, political fragmentation, delegitimization, which means people don't believe in that their government anymore, and paralysis. we were talking about paralysis when molly was talking to this equates -- there's a great quote that we live in a time where often it seems the best lack all
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conviction, and the worst are filled with passionate intensity. that's what i feel better about this with molly because we have some convictions among the best. now, the rise of the politics of hate, and by the way, i mentioned arizona. it was unfair not to mention alabama, too. [laughter] emerging markets, emerging markets, china, india particularly, facing this economic crisis lacked political institutions to manage economic hardship. so it's not clear what growth level is necessary for social stability in china. social stability in china is a very serious thing. it's not clear the world economy can take their consequences of social instability of china in a major way. and, finally, and most importantly, we have created a political and economic climate, environment where we cannot address climate change.
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we cannot afford not to address climate change. [applause] now, now, i don't mean this to be fun but we need a virtuous cycle. instead of a vicious cycle we need things go in a positive direction. we've got to start by putting people back to work. how are going to put people back to work when no business process conference that is going to be anyone to buy their products and services? that's the reality of what the problem is here. when we put -- the way we put people back to work is public investment. that's how we solve this. public investment needs it means universities. it means schools, it means preschool education. it means infrastructure of all kinds. it means the public, it means our collective wealth.
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investing in public investment, dealing with our $2.2 trillion old-fashioned infrastructure deficit, and our need to invest in a equivalent amount, and other $2 trillion to build the infrastructure of molly's generation. we do this, create jobs, boost demand for goods and services, and makes us competitive. we better do it because our international competitors are doing the same right now, and they have a big head start on us. public investment creates jobs. secondly, we've got to fix the housing mess and the student loan mess. and i confess, i left the student loan mess out of the slide, which molly was talking about earlier. we've got to fix the housing mess and the student loan mess through principle write-downs. this will i should lead to stronger banks, not weaker banks them and healthier household finances. we have, those things, putting people back to work, dealing with the financial mess, due
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principle write-downs through restructuring student loans will lead to rising consumer spending. people have money and confidence, and banks lend to actually businesses, which be a great change, a surprising, positive change. get banks to lend to businesses. if those things happened, and more investment is to rising productivity. now we need this little thing called worker bargaining power because we don't have worker bargaining power, productivity just makes the rich richer. we tried it out for the last 30 years, it doesn't work out too well. but if we get the wealth we re-create, distributed a little bit, then we get stronger demand, people can pay taxes, tax receipts go up. expenditures to keep people going when they're unemployed go down, and the result is a healthier, more balanced the budget, the kind of thing republicans want. and a growing economy that can
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support further private and public investment, which creates more jobs to further increases productivity. then you go back to the top of the slide again. and this time you are a lot happier going back to the top of the slide and you did on the vicious cycle slide. now, that's our choice to vicious cycle or virtuous cycle? and now along comes to fiscal trap. fiscal trap is what we face this fall. the worst possible thing you could do in this situation where we are under investigation public assets, so that we are in danger to our country's competitiveness and we have an economy that is sluggish with mass long-term unemployment from the worst possible thing we could do would be to impose austerity in the short run and cut taxes on the rich in the long run. that is a recipe for immediate economic pain, political instability and national decline.
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and surprise, surprise, that's the republican agenda. their agenda is to use the threat of something called the sequester. the sequester is an automatic ask that will fall and cut $1.2 trillion out of the federal budget. the end of the year, unless something comes along to change it. half of that money comes out of domestic discretionary spending, half comes out of the defense budget. republicans are going to come along and say can't have that happen. can't have that happen. and on top of that, by the way, that payroll tax budget that president obama passed that kept our economy alive, they expire, to be through public and say we can't let that happen and we don't want to raise taxes on the but to make up the 1.2 trillion. and so, they will say we won't do anything. we will just jam everything in less the president agrees to a long-term extension of bush tax cuts for the wealthy.
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and deeper cuts in domestic spending to domestic spending means things like education and parks, the good things in life. unless the president agrees to extension of the bush tax cuts. but they will pile on, want more and more domestic cuts. now, this is as i said, it's not just cruel. it is going to be cool if this happens. and unfair. it's not just that it will line the pockets of the wealthiest among us who don't need the money, but it is a recipe for national decline. it is a recipe for ensuring that we don't educate our children, that we don't enter the new age of energy technology, that we don't fix the roads and the potholes that are outside this door. ..
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>> and it does the same thing but less obviously. simpson-bowles agenda avoids the expiration of the bush tax cuts. it cuts s and medicare. remember when i said a vicious cycle involves doing things like cutting the incomes of poor people in a reis session? cutting social security and medicare, that's what that's about. and in my, to my mind the worst thing about simpson-bowles is that it guts our corporate tax system through a sneaky little trick called territoriality where we don't tax offshore profits. you know what happens when you don't tax offshore profits but you do tax onshore profitses?
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everybody goes offshore where they don't have to be taxed. somebody thought that was, somebody in the simpson-bowles commission thought that would be a good way to address our revenue problem. now, that's the setup, that's what we've got to worry about, and now the question is, will democrats -- because we know what republicans are going to do. the question is, will democrats start making unilateral concessions? we've heard a lot of wonderful things about the democratic party, but we have this weakness which is this tendency to make unilateral concessions, to just give things away and hope that people will love us better. and we now know where that ends. right? that work out so well last summer? right. now, never let it be said that people can't learn. so today as we stand here president obama is not making unilateral concessions.
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he's sending the right message. and his message has been pretty loud and clear, pretty tough. no more extensions of the bush tax cuts for families making over $50,000 a year. -- $250,000 a year. that's the top 2%. none. [applause] and by the way, as far as i'm concerned, most people who makeover $250,000 a year are millionaires. a millionaire is somebody with more than a million dollars in as is sets. that's what a millionaire is. millionaire's not somebody who makes a million dollars a year, it's somebody who has a million dollars. people makeover $250,000 a year typically have a million dollars. it's one of the wonderful things about being, about making five times as much as the median family. $250,000 a year is fife times as -- five times as much as the typical american family makes. and the other thing that president obama has said, and this is critical because otherwise you just get gamed, president obama has said if the
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republicans want to go over a fiscal cliff meaning to trigger the sequester, if they want to go over the fiscal cliff for a few days and see how that feels in order to protect tax cuts for the wealthiest americans, president obama said he's perfectly happy to negotiate the next day. after the public can see clearly what the congressional republicans are jeopardizing in order to keep the wealthiest even more wealthy. now, we have an agenda. there is an agenda, and the public supports it, that will produce -- that will do what our country needs. and by the public supporting it, i mean at the afl-cio we have this giant polling database. and the polling on these issues is generally over 70% positive. in some cases it's over80.
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the public supports massive investment in infrastructure, rebuilding manufacturing and rethinking our trade models so that we can be competitive in the new globalized economy. the public supports a tax system where the wealthy pay their fair share, and the public supports the notion that that means higher taxes for millionaires. the public supports accountability for the banks that broke our economy. and the public supports, although you'd never know it if you lived here in washington, the public supports protecting and expanding social security and medicare. and by the way, that -- [applause] the american labor movement thinks that given that the pension system has been destroyed and taken away from us and robbed from us and that it's been replaced by, essentially, savings accounts that have no money in them that we might, that what might be in our nation's interest is not to dismantle social security which is actually close to 90% funded
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and is the healthiest part of our retirement system, that dismantling social security is not what we need to do as a country. we need to strengthen it. [applause] and that medicare is not the problem, medicare is the solution. [applause] now, just to illustrate again the short-sightedness and the self-centeredness of the agent. the other bullet that belongs here is that education and particularly higher education is a right and not a privilege. [applause] now, now let me, i'm going to conclude by saying this. this is in substantial part and directionally the agenda that president obama stands for. this is substantially and directionally the agenda of the congressional democrats.
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but what it needs to be is an agenda that our political leaders pursue at scale. when we talk about infrastructure, we need to be talking about trillions, not billions. when we talk about a tax system where the wealthy pay their fair share, repealing the bush tax cuts is not enough. it doesn't even begin to be enough. i can't, i mean, they're waving the sign at me, but i can't even begin to talk about what accountability for the banks means. the problem, why is it that this agenda which has 70%, 80% public support, why is it that this agenda is like nowhere to be seen in washington? i mean, not nowhere to be seen. it's, obviously, to be seen on this panel, it's obviously to be seen at the campaign for america's future over the next couple of days. but why is it that we're not reading about, and why are we not reading editorials in "the washington post" calling for
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this agenda? why are we not even having a discussion about scale? what has gone wrong? the fundamental challenge that we face as a nation after our collective bad bet on finance over the last 15 or 20 years is how do we overturn the political power of the winners in a losing game? you could call this, by the way, the mitt romney problem. or you could call it the jamie dimon problem. what is jamie dimon doing at the senate hearing wearing presidential cuff links? that's an agenda, that's the agenda that really faces us. the public, the public knows where to go here. the public knows how to make sure that we prosper in this century. we've got an obstacle, and it's the entrenched power of money in our politics, and it's time to move that obstacle aside. [applause]
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thank you. [applause] >> okay, thank you, damon. and it's important to remember insightful and powerful as his analysis is, he's also speaking for a very important political movement in the united states, the american labor movement, our allies -- [applause] and it is good that we came to this tutorial about the economy from the point of view of elected officials who are going to be running for office and taking this battle to the political system in the fall. thank you, jan schakowsky -- [applause] and it's crucially important that people like molly translate this into the real flesh and blood, real message and real-life experience of average people whether they're young or
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old, whether working in factories or working in the service sector. we have to build a movement that makes this economic program not only obvious in washington, but makes it inevitable in our political system. so thank you all. let's all get out there and work, and let's go on to the next set of breakout strategy sessions. thanks to all of our speakers. [applause] [inaudible conversations]
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[inaudible conversations] >> coming up next, senator marco rubio on immigration policy at a recent conference of latino leaders in florida. then lye coverage of -- live coverage of the global aids coordinator speaking about america's role in the fight against hiv/aids and other diseases. after that more live coverage as the chairman of the export-import bank talks about threats to u.s. global economic competitiveness. and the senate's back at 2 p.m. eastern for debate on bills relating to flood insurance and fda user fees as well as a judicial nomination for the southern district of florida. >> go to c-span.org to view our newly-revised campaign 2012 web site. you can watch the latest events
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from the campaign trail with president obama and republican presidential candidate mitt romney. you can also read what they're saying on major issues and watch the latest campaign ads and web videos in our campaign 2012 blog. it's all at c-span.org/campaign012, your resource for this year's presidential race. >> sunday award-winning author and historian david pietrusza is our guest on booktv's "in depth." his passion for u.s. presidents and baseball has resulted in a dozen books including 1920: the year of the six presidents, 1960, and rothstein about the fixing of the 1919 world series. join us live with your calls, e-mails and tweets for david pietrusza sunday at noon eastern on booktv's "in depth" on c-span2. >> when did clean energy become
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a dirty word? i mean, you know, what is wrong with clean energy? you can believe, you know, what you want about our existing energy sources, but why couldn't you also believe that there's an opportunity for clean energy? >> i think we need to create demand in the next five to ten years for renewables to offset all the advantages that fossil fuels have had, and i think it's clearly happening on a state--state basis. >> roughly three times as much of our energy is consumed in mobility as it is in, you know, heating our homes and our offices. and natural gas, again, north america's the only continent where we don't have widespread vehicles coming off the assembly line that can use compressed natural gas. there's still a ton of people out there that honestly believe that come pressed natural gas vehicle, cars or trucks, are more likely to burst into flames during a crash. >> developing alternative energy sources were all part of a next
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generation energy forum hosted by the atlantic magazine. watch their conversations online at the c-span video library. >> now, florida senator 345r coe rubio -- marco rubio. he spoke about immigration policy and called government bureaucracy the single greatest contributor to illegal immigration. he made these remarks at a recent conference at the national association of latino elected and appointed officials held in florida just outside of orlando. this 20-minute event begins with an introduction by former u.s. florida senator mel martinez. [applause] >> thank you very much. what a great honor it is for me to be with you again. i am one of those who from time to time has had the privilege to speak to you at your conferences, and i know that this is an ever-growing and ever more important group, so i'm delighted to be here with you today. my job today is to introduce to
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you someone that i think should be a great source of pride to all of us. so marco rubio, an american son, and that's the cover and the title of his new book that's come out. and i think if you picked up his book and you read it, you would understand that he is absolutely one of us. and why is he one of us? he's one of us because he comes from family of humble means who chose a better life by coming to america, immigrated here and then he is the son of that family, the second generation of that family, a family that worked hard, not in hue that luten -- high that lute tin jobs. they worked at hotels, they were the servant class, and their son got an education, became a person who wanted to give back and be committed to public service, rose through the ranks in remarkable time and frame. his dream of being an nfl wide receiver never materialized, but he did something even a little more remarkable.
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he became at a very young age the speaker of the florida house of representatives. i was always very proud of him and what he did and what he accomplished at such a young age. i remember once taking him on a tour of the capitol when i was up there as the united states senator from florida. and what an honor it is for me to be here today to introduce to you one of of us -- [speaking spanish] who knows what it's like to work hard, who knows what it's like to get up in the morning and see your dad get off to work. and he knows very well that it is the future of our country and how we handle our educational system and how our children get an opportunity to be educated so they can succeed as he's had an opportunity to succeed. so, please, help me to welcome someone i'm immensely proud of, the united states junior senator from florida, marco rubio. [applause]
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>> thank you. thank you, senator martinez. [speaking spanish] thank you for, senator martinez, for showing my book which is available at amazon for $16.99. [laughter] thank you. appreciate that very much. [speaking spanish] [speaking spanish]
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[applause] >> i apologize to those who don't speak spanish. i was just telling them how i saved a bunch of money on my car insurance. [laughter] thank you. so i wanted to talk to you today, and i thought, well, you know, one of the things that frustrates me sometimes is that when people speak to hispanics and latinos, they only want to talk about immigration. and the point that i make is immigration is a very important issue in the hispanic community. but the vast majority of us do not wake up in the morning and think about immigration all day. we wake up in the morning and have the same worries, the same hopes and the same fears as everybody else in this country. we worry about making payroll on friday, we worry about balancing our family's budget at the end of the month. we worry about the schools our kids go to. we worry about whether tomorrow
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will be better for them than it's been for us. and that's what i wanted to concentrate on here today when i came to speak to you. but i won't necessarily limit myself to that because i think that both my head and my heart tell me that today perhaps we are as close as we have ever been to a critical turning point in the debate about immigration. and so i've abandoned my hopes of only talking about the economy and jobs, as important as that may be, for one moment and one day in the hopes of speaking frankly to you about the issue of immigration, what i've learned in my year and a half in the senate and what i hope can happen moving forward. the first thing i learned when i got to the senate is no one wanted to talk to me about it. there were too many scars, too much pain, too many people had been beat up by what had happened four or five years before. i tried to raise the issue, and people would say, look, i just don't want to go there again. i tried that five years a i tried that three years ago, and
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all i got was grief. that's the impression i got when i walked into the senate, and i want you to know it wasn't just republicans. it was senators who had been oned by the way this issue was approached and just really didn't want to talk about it anymore. that's what i first learned. the second thing i've come to realize is how truly complicated this issue has become. this is not a simple issue. immigration -- both sides like to talk about this issue like it's an easy yes or no answer. it's much more complicated than that. and those of us involved in the debate need to start to recognize that openly. that both sides of it raise valid points. the people who are against illegal immigration and make that the core of their argument view it as only a law and order issue, but we know it's much more than that. yes, it is a law and order issue. but it's also a human issue. these are real people. these are human beings who have
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children and hopes and dreams. these are people that are doing what virtually any of us would do if our children were hungry, if their countries were dangerous, if they had no hope for their future. [applause] and too often in our conversation about immigration that perspective is lost. who among us would not do whatever it took to feed our children and to provide for them a better future? and yet the other side of the debate is equally guilty of oversimplifying it. illegal immigration is a real problem. it is not an illegitimate problem. it is real. it has consequences. one of the great untold stories in america today is that no community understands that better than ours. it is latinos, it is hispanics who see the impact of illegal immigration up close and personal, both the human element of it, but also its costs and the burdens that it places on our society. and places where it's
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uncontrolled. we also need to begin to recognize that we are an extremely generous country. a million people a year immigrate to the united states lislely. there isn't -- legally. there isn't any country in the world that comes close to that. we need to recognize there are probably 50 million people -- including many in latin america, maybe your family members -- who are waiting to come here legally. every single day in my offices here in the senate i have people come in and say my mom has been waiting, my sister has been waiting for 15 years. they've paid the fees, they have waited their turn. what's our message to them, come illegally, it's cheaper and quicker? that's not an answer either. last but not least, there's this notion that sometimes i feel like people are demanding the rights. the truth is there is no right to illegally immigrate to the united states. and when we talk about illegal immigration, it's not about demanding rights, it's about appealing to the compassion of
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the most compassionate nation in the history of the world. why is this issue simplified? i'll tell you right now, because it is powerful politics. it is a powerful political issue. i have seen people use it to raise money. i have seen people take the legitimate concerns about illegal immigration and turn it into panic and turn that panic into fear and anger and turn that anger into votes and money. i've also seen people on the other direction. anyone who disagrees with their ideas on illegal immigration is anti-immigrant and anti-hispanic. that's ridiculous. that's ridiculous. everything's about politics. i've seen it firsthand. three months ago i came up, i started to work with some of my colleagues on a concept, how can we accommodate children who are in this country through no fault of their own undocumented, and how can we do it in a way that honors our legacy as a nation of immigrants but also as a nation of laws?
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and i proposed some specific ideas, and i publicly talked about it. the reaction from many on the left was an immediate dismissal. i saw people say on the left that i was proposing a new three-fifths compromise, hearkening back to the days when a slave wassen o three -- was only three-fifths of a person. i was accused of supporting a dream act without a dream. of course, a few months later the president takes a similar idea and implements it through executive action, and now it's the greatest idea in the world. i don't care who gets the credit. i don't. but it exposes the fact that this issue is all about politics for some people. not just democrats, republicans too. the proof is after actions last week all the questions are about what a brilliant tactical move it is not from you, but from the people who cover politics. all they want to talk about is, well, what does this mean for the election? what does this mean politically? wasn't this a brilliant political tactic? i guess if this is what this issue's about to you, then maybe it was.
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but i wasn't looking for a talking point. i wasn't looking to influence the election in november. i was looking to help these kids that i've met. these aren't kids i've read about in the newspaper, these are people that i have met who came here when they were 5 who didn't even know they were undocumented until they applied to go to college. the valedictorians of their school who want to be molecular biologists who got accepted to an ivy league school, and we're going to deport them. in a country that needs more molecular biologists. that's what it was about for me. that's still what it's about for me. and only if it's about that this ever get solved. as long as this issue is a political ping-pong that each side uses to win elections and influence votes, i'm telling you, it won't get solved. was there are too many -- because there are too many people who have concluded this issue unresolved is more powerful. they want it to stay unresolved. it's easier to influence elections.
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it's easier to use to raise money. the only way to solve it is a balanced approach that recognizes that this is complicated. and i think the way you have to do it is you have to approach it, number one, by understanding that we have to win the confidence of the american people back. the confidence that we're serious about discouraging illegal immigration in the future. and that's why enforcement processes are important as part of any reform. but i also think we have to reform our legal immigration system. i tell people all the time the single greatest contributor to illegal immigration is a burdensome, bureaucratic and complicated legal immigration process. there are millions of people in this country that would go back home if they thought they could come back next year again to work in their seasonal jobs. and i know of no one that wouldn't rather emigrate legally if they could, if they could afford it. there are some people that are out of status true no fault of -- through no fault of their
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own. someone told them they were an immigration lawyer, and they gave the guy a $5,000 check, and the guy vanished, and now they're undocumented. it's complicated. if we are able to reform and modernize our legal immigration system, if we can win the confidence of the american people back, we're left with the issue of millions of people that are still undocumented, and the great question then is, what do you do about them? i've talked about what you do about the kids. what about everybody else? here's the truth if we're honest with ourselves; we don't know yet. it's not oozy. i know we're not going to round up and deport 12 million people. i know we're not going to grant amnesty to 12 million people. and somewhere between those two ideas is the solution. it will never be easy, but i promise you it will get easier to find if we have a legal immigration system that works and the confidence of the american people that we're serious about enforcing our
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laws. now, some may say that's too much to ask, this balanced approach. well, it is if it continues to be politicized. i was tempted to come here today and rip open the policies of the administration. i know in a few moments you'll hear from the president. i was tempted to come here and tell you, hey, he hasn't been here for three years. what a coincidence, it's an election year. why didn't he make this issue a priority? [applause] i was -- well, i guess i just did tell you. but that's not the direction i want because if that's what i came here to talk to you about, then i would be doing the exact same thing that i just criticized. the exact same thing that i just criticized. so is it possible for us to reach that point? let me close by telling you why
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i think we should and we must. i really rely on a story i recently learned of. i didn't know this story before. i recently learned of it. it's the story of an elderly man, came to the u.s. legally. and then decided to go back to his country because he was a little discouraged by the way things were here, and he decided to go back to his country again. and then after a few years there things weren't going well, and he decided to come back. now, i don't know this for sure, but when he came back to the united states, i think he thought that since he had come in legally once before, he was still able to reenter. but he was wrong. i think he just didn't realize -- i don't know this for sure, but i think he didn't realize that if you leave for a year, you're not -- your immigrant visa expires, and you have to renew it. he's an elderly man, and he was disabled. didn't speak any english. he gets to the united states and immediately he's detained and questioned. and he's told he has to appear in court where he's ordered deported. i just think if you are elderly,
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disabled, don't speak the language, confronting american jurisprudence, he must have been panicked. but somehow along the way because of the conditions in his country and all kinds of other factors at the time, the u.s. said, you know, you don't have a legal right to be here, but we're going the let you stay. because your case, your story tugs at our heart and our legacy as a nation of immigrants. this story matters a lot to me because years later that man was so grateful to this country that he would spend hours with his grandson talking about how extraordinary america was. what a special country it was. and today his grandson serves in the u.s. senate and stands before you here today. [applause] knowing, knowing that we have in the past been a nation that's
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been able to balance our laws and our compassion, our desire to live in a nation of laws i but also to have a nation of immigrants. so i close by asking you, how did we ever get to this point? how can immigration be a controversial and divisive issue in a nation of immigrants? how can a country built by people that came from everywhere else be so divided over who gets to come here now? and maybe the best way to begin to confront it is to remind ourselves of who we are. and how tightly wound it is into the essence of our greatness. the statue of liberty is often seen as a symbol of immigration. that's not why it was built. the statue of liberty was build as an ode to the republicanism, not republican party. [laughter] although some people claim -- i'm kidding. but the reason why it became a symbol of immigration is because immigrants from europe when they would come into ellis island
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would sail right past it, and the first thing they would see about america was that statue. and the turn of the last century there was a poem that was written and inscribed onto a plaque there that i think reminds us of who we were, of what makes us different and of who we must remain. when i read those words, i'm reminded of a journey my own parents took. of people who were desperate to provide their children life better than theirs. of making sure that every opportunity they did not have would live in the lives of their children and grandchildren. this sentiment exists among people all over the world. but only here in our country has that dream become reality time and time again. and so let us remind ourselves once again of the words of that poem which call to us and say to answer the simple question of what do we love more, do we love our parties more than our
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country? do we care about the next election more than we do about the future? are we still that beacon of hope to the world? are we still the country our parents found when they came here, or will our children inherit a different one, one more like the rest of the world? are we still the nation that believes in these words: keep ancient lands our storied pump, cite she with silent lips. give me your tired, your poor, your huddled masses yearning to breathe free. the wretched ref fuse of your teeming shores, send these -- the homeless, the tempest tossed -- send these to me. i lift my lamp beside the golden door. thank you. [applause]
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>> and we are live this morning at the brookings institution here in washington for an update on the president's emergency plan for aids relief with remarks from dr. eric goosby, he is the u.s. global aids coordinator. the president's plan is aimed at helping and saving people with hiv/aids around the world, and it started during the presidency of george w. bush in 2003. we expect it to get under way in just a moment. [inaudible conversations]
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[inaudible conversations] [inaudible conversations] [inaudible conversations]
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>> again, on this monday morning we're live at the brookings institution waiting for an update on the president's emergency plan for aids relief. we'll hear from dr. eric goosby. this is expect today start in many just a moment. live coverage will continue here on c-span2 at noon eastern as the import-export bank president will visit the center for american progress. he'll be talking about export strategy and release findings of the bank's annual competitiveness report. again, that'll be live at noon eastern here on c-span2. u.s. senate will gavel in at 2 eastern. senators will debate a bill to
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continue the federal flood insurance program. at 5:30 they'll turn to voting on an fda user fee bill, moving that bill forward. it lets the agency collect fees to pay for its approval process on prescription drugs and medical devices. we'll have the senate live again here on c-span2 starting at 2 p.m. eastern. this week, later this week washington journal will continue its spotlight on magazines. wednesday former bank of america president sally craw check, she's written an article for harvard business review on how to improve the banking industry. the article is linked at c-span.org, and we'll talk with her live wednesday morning at 9:15 eastern. that, again, is on c-span. also on c-span this morning we are live at the court, supreme court awaiting a possible decision by the court of the nation's health care law. we'll have the decision when it comes down along with your phone calls and remarks from officials who are watching the courts. again, that's live on c-span
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this morning right now. [inaudible conversations] [inaudible conversations]
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>> thank you, everyone, for joining us. welcome to brookings. i'm noam unger, i'm a fellow with our development assistance and governance initiative here. brookings is very pleased and honored to welcome ambassador eric goosby, the u.s. global aids coordinator, today for our discussion; key lessons from a decade of action on global aids and the way forward. in the interest of time, i will forgo the truly detailed recitation of ambassador goosby's very impressive biography, but i will note that despite the emphasis on today's event on the lessons from the past decade, ambassador goosby's experience in the fight against aids makes him a pioneer in the matter. since his involvement dates back more than 30 years to when he
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had not yet completed his residency, but was already becoming a specialist in the then-unidentified disease that would come to define his career. in the 1990s he helped lead domestic federal efforts to respond to the disease, including setting up the ryan white care act that unlocked federal support in response to aids. and then a decade ago he turned his focus to the global pandemic establishing the pan pangaea gll aids foundation to build better capacity and response in resource-poor environments. now he has brought all those experiences to bear in his role as u.s. global aids coordinator at the state department. his office has the authority and the responsibility for coordinating, overseeing and managing all aspects of the president's emergency plan for aids relief which accounts for the overwhelming majority of global health assistance funding from the u.s. and that, in turn, constitutes more than a quarter of u.s.
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assistance resources globally, to put it into context. he also oversees u.s. government engagement with the multilateral global fund to fight aids, tuberculosis and malaria. his visit to brookings today is particularly well timed in the lead-up to the large international aids conference that will take place here in washington, d.c. in a month's time. and after the ambassador's remarks, i'm sure we'll have time for what will be some very, a very interesting set of questions from all of you. so let's get to it and, please, join me in welcoming ambassador eric goodsly. [applause] eric goosby. >> well, thank you very much, noam, appreciate the kind introduction. it's really an honor to be with you today. i think that the brookings institute has really gone way out of its way to make me feel welcome but also to kind of scramble this to make it a meaningful and rich contribution
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for both people in the audience and those on video. the aids 2012 conference is now just one month away, as we heard. thanks to the obama administration for the first time in more than 20 years this meeting is taking place in the united states. as americans, this should make us proud. what should also inspire pride is that the conference comes to the nation's capital at a pivotal moment in our fight against aids. seven months ago many of you in this room heard secretary clinton declare the historical of creating an aids-free generation. less than a month later the president stated that we can and not only can win this fight, that we will win this fight. these words from the president and the secretary were based on a series of scientific discoveries primarily funded by the united states which has become game changers over the course of the past year.
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and because of the science, the world will come together at aids 2012 to say that we're turning the tide. that's the theme of the conference. a tide that once overwhelmed the world is now a tide that is uniting the world. hope is truly taking the place of despair. but we're not going to be wholly successful in our fight against aids or improving global health overall if we don't take on three specific areas of improvement. first, let me offer a bit of history. i have been involved in this fight against aids for a very long time. in the 1980s and in 1981 i was working as a clinician in san francisco and experienced the grief and loss that came with seeing so many people succumb to the disease because we had nothing to stop the progression of the disease in them. that all changed in the mid 1990s when antiretroviral
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treatment literally brought people back from the brink of death with highly active antiretroviral therapy in the form of prohibit to haves. in the united states, having access to this treatment has transformed hiv/aids into a long-term, chronic condition cared for largely in an outpatient setting. it has saved many, many lives. but this access to treatment was not universal. oh, about 10, 13 plus yearses ago i turned my attention to the global pandemic, and i will never forget what those early years showed us. aids was wiping out a generation and reversing health gains in africa. hospitals were completely overwhelmed by the massive volume of dying patients, people. these were routinely multiple people in a bed, people on the floor. they weren't getting the antiretroviral therapy that was available here in the united states and europe, so hiv
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infection was truly a death sentence. aids threatened the very foundations of society. it wiped out people in the prime of their lives when they should have been caring for their families. it created millions of orphans unable to attend school without the support provided by their parents. and the disease stalled economic development. leaving countries stuck in the cycle of poverty. that in turn created societal instability leaving the u.n. security council to identify aids as security issue in 2001. it's because of this emergency that resources were mobilized to address aids. we weren't looking around for a global health issue to spend money on. in truth, this crisis found us. today aids is no longer a certain death sentence in sub-saharan africa. a decade ago almost no one in africa was receiving treatment. now 6.6 million men, women and
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children are on antiretroviral therapy in developing countries with the vast majority of them being in sub-saharan africa. it's almost impossible to overstate america's contribution. through pep far as of last year the united states supports nearly four million people on treatment. that's up from 1.7 million in 2008 showing continued, rapid expansion even during these tight budget times. in 2011 pepfar's program supported drugs to prevent methods of child transmission. in 2011 alone to 660,000 hiv-positive pregnant women. thanks to this effort an estimated 202,000 infants were born hiv negative. we also supported hiv testing and counseling for more than 40 million people, again, in 2011 alone. truly an incredible achievement.
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these results aren't just numbers, they are lives saved, each of them. each individual is part of a larger family and community that has been and has and will continue to be our best test of success. for pepfar it's all about results. by adopting a targeted approach to address one of the most complex diseases and global health issues in modern history and then taking it to scale with you are yen si and commitment -- urgency and commitment in resource-challenged settings, the united states has challenged the conventional wisdom on really what is possible. our response to the global aids crisis has also transformed the health sector. we're seeing more and more after the initial investment in infrastructure. while focusing on hiv, pepfar's investments have strengthened national health systems so they
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can more effectively deliver essential services for all the needs of their people. including the non-hiv needs of hiv-positive people. clinics and hospitals that no longer were overwhelmed with dealing with aids now have the capacity to address other health issues that our people face. beyond that we have rebuilt hospitals and clinics, increased quality and numbers of trained health care workers, put in patient information systems, put in quality-controlled laboratories and strengthened our commodity procurement and distribution systems. our focused investments have enabled access to basic health care often where little or none existed before. in countries with substantial pepfar investments, we've seen reductions in maternal, child, tb-related mortalities,
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increased use of anti-natal care, wider availability of safe blood just to mention a few. all of this helps explain why pepfar remains a true example of bipartisanship. people sometimes say that aids' exceptionalism has distracted us from other problems, but that's simply not true. our response to the hiv/aids crisis has increased the size of the pie for global health and bolstered systems that can now respond to a variety of health issues that confront the population. in reality pepfar has proved that we can take a situation with little hope and turn it around. it challenges all of us to raise the bar for what our global programs are expected to achieve because they must. and this brings me to the first issue that i want and need to bring to stop -- to bring to you
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to consider, and that is to stop treating pepfar as one-off health program. and start looking at it as the foundation of what we can do with our global health challenge. we need to stop claiming that aids is taking away attention from other diseases and look at what we can be when we build upon our substantial aids investment and response. we need a global health vision that is additive to our global aids response and allows us to capitalize on the investments already made. when you think about this, if pepfar has built a clinic, trained a doctor, a nurse, a lab tech, put a laboratory in place that wasn't there that is reliable and can give the provider of care diagnostic information to make diagnoses or
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monitor care, to add a maternal capacity or a child health clinic, immunization capability, nutrition, etc., over time we should be able to add the treatments for the chronic diseases that are also increasing again in our hiv-positive population as well as our hiv-negative population such as hypertension, diabetes and coronary artery disease. this doesn't mean -- and i emphasize this -- that we stop our work on aids. what it means is that we need to make sure that health systems are not only prepared to deal with hiv, but with the other health challenges faced in the same person and communities affected by aids. we are at a point where we can turn to expand the service portfolio at the already-established aids sites. our path to creating an aids-free generation requires us all to work smarter and better
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together. which brings me to the second thing i need to put before you to really successfully achieve an aids-free generation. and that is country ownership. this is the starting point for everything we do. this challenge was stated clearly in oslo earlier this month by secretary clinton, and i'm pleased to announce today that we are going to hear more from the secretary on her dedication to creating an aids-free generation at the aids 2012 meeting. in oslo the secretary said, and i quote: country ownership in health is the end state where a nation's efforts are led, implemented and eventually paid for by its government. communities, civil society and the private sector. to get there, a country's political leaders must set priorities and develop national plans to accomplish them in concert with their citizens which means including women as well as men in the planning
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process. and these plans must be effectoffly carried out -- effectively carried out primarily by the country's own institutions. unfortunately, country ownership is sometimes misunderstood to signal a complete absence of external support for a country's response. let me be very clear that this is not what we mean. what we do mean is that the overall leadership role belongs to the country, not to external partners. the united states cannot be the ministry of health for the countries in which we work. in terms of health, this leadership means planning and overseeing its national health sector. and it means that we need to address head on the difficult barriers to country ownership. donors failing to coordinate or allow coordination and making unreasonable demands on partners, governments that are devoting too little money to health and not invest anything anything -- investing in their
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people, not being held accountable, and i underline in this one, not being held accountable for their results. there's no time to play the blame game for these obstacles. there's no yield on that. we've all been part of them. it's time for us to pivot and explicitly insert lines of accountability so our management and oversight can grow and learn from lessons that allow us to improve and change the output of these programs to match the changing needs of the populations we serve. as external partners, we must acknowledge that we have a long history of playing the leadership roles. often creating an unhealthy relationship of dependence. over time this diminishes the capacity of the country to insure that services persist and, most importantly, remain at high quality. so we need to commit ourselves to support a health system organized around the needs of the country's populations rather
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than around our needs as donors. we must choose to step back and support country leadership rather than reserving that role for ourselves. we have a responsibility to build capacity through technical support as countries assume more and more managerial and financial oversight and responsibility. as for governments, they have a responsibility to their citizens to orchestrate this continuum of services. they must identify their country's unmet needs, prioritize the needs, make the allocation decisions against those unmet needs using diverse funding lines such as the global fund, pepfar, other bilateral programs so they are additive and complimentary. governments must include the people in the decision-making process who use the services. including civil society
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representation, civil society organizations, the faith community and, of course, the people living with hiv. let me address the issue of financing by countries. it is only one dimension of country other thanship, but it is an important one -- ownership, but it is an important one in this err after of constrained global resources. at the summit in 2001, african nations agreed they would devote at least 15% of their national budgets to health. to date, few have. as secretary clinton has said, this needs to change. but we're also seeing progress as countries begin to step up and take over services from external partners. in south africa the government has more than doubled it commitment to hiv over the last two years to over $1.3 billion per year. a special two-year commitment by pepfar to provide antiretroviral drugs in south africa with
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aggressively-negotiated generic drug pricing as part of the agreement helped the government launch it own increased purchases with new low prices allowing a shift from a trigger to initiate antiretroviral therapy at 200 swz cd4 cells to the 350. other countries have increased investments and are making this a point of emphasis in our diplomatic discussions. in addition to financing, discussions of country ownership must address the political and cultural barriers of an effective response. in the hiv/aids dimension, this often involves marginalized populations that are often at most risk for hiv. including men who have sex with men, people who inject drugs and those who are experienced sexual violence. we all know that countries are at different points in terms of recognizing these realities and the need for public health responses to incorporate human
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rights remains critical. pepfar's job is to bring science to the table and pursue dialogue toward responses that are both country-owned, science-based and human rights-sensitive. another barrier to progress at the country level is failure to fully include women and girls. given its disproportionate impact on women and girls, hiv is not only a health issue, it remains and has been a woman's issue. pepfar and all hiv programs must be part of the broader effort to support countries in meeting the needs, the health needs of women and girls including those living with hiv. as external partners, we are in a position to engage countries in dialogue around and strongly support country-owned plans that will improve the overall health of women and girls. there's no doubt that the move toward country ownership in
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pepfar is a work in progress, but it is well underway. during pepfar's reauthorization in 2008, congress provided us with the authority to establish partnership frameworks to make this transition. the joint strategic road maps on a grade two and signed by the united states and partner governments promoting mutual accountability and sustainability over a five-year time period. pepfar has signed 32 partnership -- 22 partnership frameworks since 2009 launching really a new era of collaborative planning with our partner governments. i leave tonight to sign the partnership framework in haiti. most importantly, the discussions are creating a new level of trust and transparency among those involved as partners reveal vulnerabilities and limitations in a shared effort to prevent gaps and services. i believe we need to reach that
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same point of partnership in all of our health global work. for example, african countries face health work force issues handicapping all their health efforts. through the medical and nursing education partnership initiatives, pepfar is supporting countries and developing sustainable local capacity to produce skilled doctors, nurses and bid moves for -- mid wives for generations to come. we make grants directly to the african educational institution, the medical school or the nursing school. they are the principal investigator in these grants, they are the senior partners in these relationships identifying a u.s. counterpart in the process. in sum, as partners we must challenge ourselves to apply our human and financial resources in ways that strengthen national
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leadership, to expand the country's capacity, to make the programs more sustainable with the sole purpose of saving more lives. but country ownership alone will not solve the aids crisis, let alone our broader global health challenges. we must also challenge the world to accept that global health remains a shared responsibility. it is not the purview of governments alone, but also the private sector, civil society, faith-based organization and communities who together contribute financially and otherwise to the fabric that is needed to establish a responsive and sustainable health care delivery system. a crucial part of this shared response is the multilateral mechanisms, and this is the third thing that we need to achieve in an aids-free generation. that is a robust, multilateral response particularly targeted toward the needs at the country level.
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the global fund to fight aids, tuberculosis and malaria really is an indispensable tool and remains the single conduit through which other countries that will never have the bilateral program can funnel resources to those countries in need. ..
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part of our shared responsibility is to ensure that all resources are used as efficiently and effectively as possible. with our support and encouragement the global fund has taken a number of actions in recent months to recommit itself to this goal. the fund's new general manager, gabrielle, has dramatically we oriented the fund to assume a role as an active investor. i am very optimistic about the impact of the fund moving forward and that heightened impact will strengthen its ability to generate additional new resources. to support country on programs, pepfar and the global fund our increasingly engaging in joint planning, and now co-financed many components of country responses. for example, the global fund resources covering the expense incurred by buying antiretroviral drugs, while pepfar focuses on targeted
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technical assistance, monitoring and evaluation systems, patient information systems, voluntary counseling and testing, et cetera. we think a series of resources together that at the individual site create a responsive medical delivery capability. the reality is that we need both the pepfar and the global fund resources to be successful, but they need to be convened by the country. all, country global fund, pepfar, bilateral, foundations, et cetera, resources, all are central to any vision of the sustainable future for global health. and it is through that responsible orchestration by the partnered country that this will be realized. another important multilateral to mention is that of the technical agencies, the united nations family, including the w.h.o. they need for the technical contributions of the country
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level is great. these organizations have done a tremendous job in marshaling global support for health issues, but now we need to figure out how to best maximize their impact at the country level. this is the dialogue i look forward to having with my colleagues globally. multilateral activities in country that beats -- must be assessed to the same lens of the candidate as those of pepfar, or our partner country governments, asking whether they're making a contribution that is truly additive. if not, it's incumbent upon the country government to address that, and on all of us to support them in doing so. when you look at the three issues we have addressed today, recognizing pepfar as the foundation for other global health successes, promoting country ownership, and fostering a shared responsibility, the thread that unites them to get is that we are truly putting countries in a stronger position
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to ensure we can reach the goal we are all committed to. achieving an aids-free generation and creating a stronger and more secure world. so, as we draw closer to aids 2012, the meeting, let me end where i began. and that's with a message of hope. we know what most of us know and have learned over the years. we know what based he done to end this epidemic. and i have great hope that we can do it and get it done. hope that we see in the science that guides our efforts, hope that we see as the world unites to turn the tide against this devastating disease, hope that has taken the place of despair, hope that keeps everyone in this room pushing forward, getting out and doing it again. it's an honor to be part of this effort. it's an honor to be with you all as we move forward, as we begin
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to see the light at the end of the total. i want to thank you for this opportunity to address you this morning. thank you. [applause] >> thank you. thank you, ambassador goosby, for those remarks. from a development effectiveness perspective, it is wonderful to hear from you later of this program about an approach that is result oriented, that is evidence-based and with increasing emphasis on country ownership. thank you very much for that. you spoke about strengthening broader health systems, and also about others stepping up to advance multilateral support. i'm sure we will get questions on those topics, and some i suspect i'm different ways of pursuing and prioritizing prevention and treatment. but before i turn over to the audience, i'd like to ask a question of my own. about the transition to greater country ownership.
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which are clearly essential. this administration has had a heightened focus on sustainability, and some of the programs component she mentioned that focus on building capacity, some of them have been in place for quite some time. others are newer, widely recognized innovations that are just coming online, like these partnership frameworks. do you envision significant share of -- shipped within pepfar's overall budget? not sitting in congress are looking at the overall program in the big picture. do you envision significant shifts that clearly demonstrate an even greater focus on building capacity? and if so, what do those shifts look like and what are the trade-offs? you've talked about the trade-offs of not building capacity in country, but if there is a big shift now within the programs, to build bigger capacity, are there other trade-offs in the other direction? and especially in light of the possibly flat or even decreasing budget.
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>> sure. well, i think that if we are serious about shifting our emphasis to country ownership, we will not achieve the sustainability that you refer to. we need to take the leap to partner with our partner countries in a dialog that allows them to gain trust so they reveal their vulnerabilities to us and their ability to manage, oversee, monitor and evaluate these programs. once we can develop a technical assistance kind of strategy or curriculum for each country, for each ministry at provincial levels as well as federal, we will then be any better position over time to expand the capacity to truly manage and oversee these programs. the management and oversight is critically dependent on a monitoring and evaluation system
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that gives as close to real-time feedback to policy decision-makers, allocation decision-makers, where and what they're doing, what they are not doing, what they need to continue to do and what adjustments are needed in the program to achieve them. i believe that, although this is a slower trajectory to get a capability in place, it is the only means through which a sustainable service portfolio can be realized in these countries. it's a long haul. it's a long-term commitment, but the united states remains committed to that sustained portfolio of services, and not just a transient expansion of services with the retraction on the ending of the program. >> in terms of the shifts that we expect, the vision here is to take an existing platform that is strong with trained doctors, nurses, laboratories, as well as
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patient information systems, procurement and distribution systems, all of which could be used for any service needed, be it hiv/aids, tb, malaria, maternal and child health services, children's services, nutrition, et cetera. those types of expansions need to be added on to that platform to allow the services to increase that are available not just to the hiv-positive person already using the site, but also for those who are hiv negative who now can start using the site. i don't envision shifting resources from aids to hypertension, diabetes and coronary artery disease, insect and so far as they need a lab to support diagnosis and treatment of those other diseases. they need doctors. they need versus big they sister denita procurement distribution system. all of those need to be taken
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advantage of an use for the same purpose. other resources need to come on and be at it to to the already existing platform. and we need to be open to using our aids specific resources to expand them and stretch them as far as we can, to support that expansion. >> thank you. i will now turn to the audience because i know people have been waiting patiently with question. it had a question, please raise your hand, wait for the microphone, and identify yourself, and please make sure it is an actual question. i will start here in the third row up front with you. please wait for the microphone. >> well, thank you. this is chris collins. thank you, ambassador goosby, for your tremendous leadership. and it's truly incredible what this program has accomplished. you know, in november of last year, secretary clinton gave a wonderful speech, and in that speech, said it was a policy prior to achieve an hiv free
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generation. she did acknowledge of course you can't deliver those in the isolation of but she called a three court intervention. i'd like to get update on where we are with going to scale with those interventions the secretary called out. they were treatment, voluntary medical male circumcision, for example, where are we in terms of the country operational plan review, and bring to scale those three core pieces as we know, the allocations to treatment have been falling over all in pepfar. i'm wondering if that is changing? thank you. >> thank you, chris. those are all good questions. we have reviewed our country operating plans for 2012, and have tallied up, i don't know where we are, in our pursuit of kind of world day-to-day target. those include the treating
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targets as was the male circumcision, the expansion of services as well. we believe that we, in light of the review, are on track to achieve all of those. we, since 2009, have continued to expand all of our portfolio areas of care, prevention and treatment significantly. really during this kind of resource constrained budget period. and we are quite confident that we will achieve the goals that we -- were articulate by president obama and secretary clinton. in terms of male circumcision scale, it is a slower process. we have learned this by direct experience. having the political body in is difficult to get, and critical to have before you commit to implement the program, trying to
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put the other first doesn't work. we have kind of pulled back in that expectation, putting the cart before the horse, and are now showing up the political body in and the kind of targeted community awareness that needs to come with that for both the mail as well as the partner. and have given, gotten a lot better at doing that. it is going to be, other three, the most challenging to achieve, but we are positioned to achieve it and are budgeted to achieve that as well. in terms of the pmtct, we have been in a strengthening exercise really since 2009. we, over the last year, partnered with una, unicef, debbie w.h.o., other both private and public sector partners to bring the resources together to aggressively move to scale our pmtct effort. we have targeted the other
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390,000 children who are born hiv-positive annually on the planet, we have looked at where countries, what countries are contributing to that. they boil down to about 30 countries, 22 of whom are in sub-saharan africa. we have developed specific plans to look at what their current effort is, and looked at the holes and drop off from testing is taking to initiation of antiretroviral therapy for pregnant positive women. we've also looked at where and when they are identified and on antiretroviral therapy for both the woman and the baby, that they have a seamless line into follow-up care for the continued antiretroviral therapy. we've also fondled the hiv-positive into the treatment line, but have not forgotten the hiv-negative and high risk, and the hiv-negative prevention, kind of messaging, that should go along with that, that tried
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to address that as well. i am confident that with our current plan and our current portfolio in each of the countries that we will move aggressively toward the aids regeneration, achieve the goals that were articulated last year by the president and the secretary, and i believe we have engaged in the other dialogues needed to make sure that this effort can be sustained. multilateral dialogue as well as dialogues with our other colleagues, and bilateral relationships. >> towards the back on the aisle, please. >> thank you. alex. thank you, mr. ambassador. that was a very positive recitation. in light of your emphasis upon
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health systems, the imports of health systems, your stress on partnership and your emphasis on multilateral programs, relationship with multilateral institutions, i thought it interesting there was not a single reference to the world bank. i do wonder if you might care to comment on that, particularly given the resources and the other kinds of indices you've talked about. thank you. >> i would absolutely include the world bank and the multilateral community. i think that all of our multilateral efforts need to understand their current contribution to the aids effort into global health in general. they need to explicitly understand what their resources are doing, in each country they are in, over a given time with a specific i do, does this intervention have a high probability of sustaining, or is this going to be a transient
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contribution, or can we change it? i think more attention to that needs to be part of the thinking on day one for any of the multinational come multilateral program, programs. i think the world bank has a special role, and there's great hope with jim can come into the position that the world bank will look at its portfolio of services, its loan programs, the resources that move from north to south, and better understand how to maximize the ability to truly have a demonstrable impact on capacity expansion for the countries. examples of world bank creating an ability to work with countries such as angola, nigeria, that have a significant mineral reservoir of resources, that those kind of extractive
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industries be tied to the treasury of these countries so they are immediately, before that resource is up for grabs, investing in health, in education for their people. when you put money in the treasury of the country, it quickly becomes subject to a lot of competing needs. and figure out how the .7 countries, norway in particular, positioned itself to make sure that those resources were tapped, botswana, another example, that those types of strategies a part of what our world bank colleagues bring into the portfolio of services and resources. >> let me take two questions, and i will love them together. so in the back, i will go to the back row. and then we will come up front on this site. spent on cato pearson with the
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voice of america. ambassador goosby, could you talk a little bit more about this partnership agreement with haiti and what it looks like? which are going to be doing tonight? >> been let's combine it with one question up front and then ambassador, if you could answer the two together. >> hi. my name is mindy, and i'm with results educational fun but i also volunteer with the local organization. and my question is, with the upcoming aids conference, it seems like there's going to be one population noticeably missing, and that is workers. the state department travel do that and pepfar's anti-prostitution pledge seems to have made it difficult for workers to engage in this conversation about ending hiv. and have had some unintended consequences. and given that you said pepfar is an evidence-based, is
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evidence-based and human rights focus, i'm wondering if pepfar is looking at redoing and possibly reversing these policies so that sex workers can better and gauge in the fight against hiv. >> well, let me take the haiti question first. this is the result of really work that began in october of '09, to work with a haitian government to define what their specific continuum of services for hiv-positive, hiv, tb, positive people are in haiti. what services the government wants to make available to each of these individuals over time, so the continuum of services that they are supporting. though services basically, what we agree to in the partnership framework that is being signed
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is a setting up a referral capability from primary care clinic systems. there are about 137 pepfar sites that are already up and running in haiti. those have arv capability. those sites match with primary care sites, will raise the primary care services in that same region. referring to secondary and tertiary facilities. there's only one tertiary facility in haiti. it dropped, fell down with the earthquake. the united states is rebuilding that tertiary hospital in port-au-prince, and it's rebuilding three secondary hospitals that are out in the states. you know, that are secondary hospitals that refer from the primary care site. so, a referral system is really what's being put up. it will have ability to also put
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maternal and child health referral in place, immunizations in place, and a small list of essential services that basically allow for screening for hypertension, diabetes and cholesterol, coronary artery disease. and that all is that the kind of mid point in being implemented. it's already started. it's about a year into being implemented. but over the next year and a half will run to completion. the building of the tertiary hospital in port-au-prince, the hospital will take about a year and a half to complete. >> yes. >> in terms of sex workers, the band that was put in place really focused on individuals ho report a disease such as hiv. that was taken off of the list as something that would block
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intrigue for a visa. any other activity really wasn't related to the waving, to the removal of that a waiver for the visa, but the customs and immigration services have a lot of, you know, flaws that are still in place that indeed it focus on the sex workers and their ability. and that is past history of felonies. so i hear what you're saying. we have been in continuous dialogue with them. we won't be able to change the law, but is sensitivity around the issue and blocking an individual who indeed wants and has something to say and do the conference is actually in dialogue for kind of exceptions to be made, but it has been a difficult thing to overcome. i appreciate your question. >> i'll jump in with a question of my own, which is a bit of a different angle, but it relates
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to your point about the broader global health and investment and the additive ways to build on to the pepfar program. >> sorry. >> within the quadrille diplomacy and development review, there was a commitment to look toward the target of the end of fiscal year 2012, so september of this year. for a transition of the leadership of the president's global health initiative, the usaid in an effort to build usaid to be the lead agency for development initiative across the government. that seems to now be on hold, or is not going through. the idea was that that target would be reached and certain benchmarks were meant. what benchmarks have not been met in this process, and as part of a hesitation that if you global health initiative is led from usaid, but pepfar is still
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kept separate from usaid, that the majority of global health investments will be outside of the sort of agency that is leading the effort? can you explain the thinking behind that? >> well, i think that the global health initiative really did show us the advantages that are realized by coordinating and working together in the grading -- integrating, our decision-making around what services were putting a place across the political programming. hiv/aids, tb, maternal and child health plan, nutrition services, a whole host of those which are in most of the countries that that part is in as well. does give an opportunity when we integrate our planning to actually implement it differently so although services rise in their ability to be available. our need to coordinate at the country level is evident, and we
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have been also impressed with a coordinated effort for usg programs, that they need to coordinate at the global level across bilateral, other bilaterals with country programming is the essential kind of means through which we will achieve a greater capability of services, more services, kind of for the same amount of resources. that ability to integrate is really a diplomatic dialogue, and the secretary, and through the global health initiative's process, has realized that we need to elevate our health diplomacy, truly through a diplomatic dialogue. and put that expectation on our ambassadors in country to support them in that effort. the decisions on the benchmarks and how this will evolve, it's
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in its final stages of deliberation, it's now with the secretary to make that final determination. so we will have to be patient with how that all the false. it will be sent. >> great. we have time for one last question, right here in the front row. and in your answer, if you could mention any concluding remarks you have as well. spent thanks very much. thank you very much for your very positive and hopeful speech. i shared a hopefulness in disputed if you look at the international numbers of development aid for help, what happened in the past 10, 15 years actually unprecedented. if you look at the institute for health metrics and evaluation reports 2011, you see that external supports, financial support for health has increased 27 billion annually for 2011. which is many times more than 50 years ago. so it is truly amazing story. if you read a little bit further
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in the report, there's some disturbing news. that for every $8 the answers -- that enters the country itself, reduces its own expenditures by 56 cents. that is a big number to that number is in line with previous studies of the same kind of phenomenon. you must be fully aware of this. what's your view of this, and what do you think in the next few years can be done to really reduce, if not eliminate, this kind of substitution? >> well, thank you for that question. it is an understandable response by many countries have resources come into global fund or pepfar, and to our colleagues in country were looking at many on that, they turn the resources toward something else. ..
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>> so i want to thank you for the opportunity to have this hour with you, and i look forward to all of you contributing in other ways to move this agenda forward. i do think this president and secretary clinton feel strongly we are at this moment in time where if we can converge resources in a smart way, to convert them at the country level, to have an agenda on day one of capacity expansion how to truly manage and oversee the programs with the resources, which we know over time evolve and will become more realistic, that our efforts will increase our ability to really put advancement health care services on the planet for those populations most at need so i want to thank you, again, for the opportunity to talk to you today. >> thank you very much for your
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leadership. appreciate it. [applause] [inaudible conversations] as this event closes, the supreme court today struck down key provisions of arizona's law on imgrants, but the portion requiring police to check the status of someone they suspect not in the u.s. legally can go forward, however, the justices said the provision could be subject to additional legal
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challenges. it prohibits arizona police officers from arresting people on minor immigration charges. the nation's highest court today struck down a montana law limiting corporate campaign spending. the justices said the decision in the citizens united case in 2010 applies to state campaign finance laws and guarantees labor interests the right to freely spend to advocate for or against candidates for state and local offices. the justices did not issue an opinion today on the 2010 health care law. they may release more opinions later this week. well, our live coverage will continue here today on c-span2. noon eastern as import and export president fred hochberg visits and talkses about the u.s. is strategy and releases the findings of the u.s. competitiveness report. senate gavels in at two eastern to continue talking about the
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flood insurance program. senators move on voting an fda user fee forward letting agency collect fees for approval process on prescription drugs and medical devices. the senate is live when they began at 2 p.m. eastern here on c-span2. also, "washington journal" continues its spotlight on magazines wednesday when sallie krawcheck writing a review and it's linked on c-span.org. talking with her live wednesday morning at 9:15 eastern on our companion network, c-span. senate subcommittee looked into the initial public offers process like the facebook ipo and how it impacted the economy. a lawyer specializing the companies going public testified. the securities and investment subcommittees hosted this hearing. it's about a hour.
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[inaudible conversations] >> let me call the hearing to order. my ranking member, senator crapo are delayed. we anticipate other colleagues will be approving shortly since the panel is assembled since the time has come, and it's appropriate to hear the hearing. let me welcome everyone to the hearing. it's an important topic examining the process and moving forward with investors. i had the opportunity to read your testimony, and i thank you, all, and it's insightful
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comments. i appreciate it and look forward to questioning. the number of individuals participating in the market is growing especially for investors saveing for retirement through 401(k) plans and other plans. once an opportunity limited primarily to institutional investors, and now the chance to participate in public offerings is increasingly available to ordinary investors. the central question i want the hearing to answer is the system fair and transparent? is it working for everyone, particularly individual investors? a dysfunctioning market can harm the economy, and the peak season for ipos in the wake of facebook's highly public trials marred by mishaps, many planned ipos have been postponedded and cancels and americans and the community is questioning the process, and frankly, we have to recognize without confidence by
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up vesters, the ability to officially form capital and to generate jobs is impaired. that confidence is fundamental to our free market system. regulators continue their investigation into some of the specific problems surrounding the facebook ipo. this hearing is a chance to broaden public procedures for taking a company public. that's one data point, but it's a much more set of issues we want to address this morning. it's confirmed the jobs act that recently passed made some of the biggest changes to markets in decades and weakens some. it may have caused other new problems allowing companies from reverse mergers to go public in the united states. a recent "wall street journal" article quoted special purpose acquisition companies and blank check companies basically empty shells, no employees used in
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mergers or as a route to u.s. stock listings have been quick to identify themselves to regulatory filing as, quote, "emerging growth companies." the lawyers describe the companies once applied to go public should be exempt of financial reporting and corporate governance rules. companies with less than $1 billion are eligible to less restrictive rules. this would have been met by a majority of companies conducting an ipo in the last several years. this is a very high threshold, obviously. companies that qualify as growth companies don't comply with the starbanes-oxley requirement through internal controls and allows them to make fewer disclosures and make a confidential process for ipos and lets the bank communicate more freely with selected investors, and more sophisticated players and bankers. the growth companies is a big business on wall street.
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businesses are expected to take advantage of the lesser requirements, and as a result, we tell investors denied critical decision. unfortunately, in the expedited process, incoming the official sigh and transparency of the existing ipo system is not really discussed. the information from investors are more efficient and transparent and can better facilitate the capital formation so important to our nation's economy. clearly, all investors face risk with small and large companies. the panelists made the case clearly risk is inherent in all ipos, and that should be acknowledged. however, we have to ensure there's not one set of rules for sophisticated wall street clients and another for ordinary investors. access to the same set of data and disclosures or equivalent data and disclosures. they are conducting due
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diligence regarding issues about the facebook's ipo. this hearing is part of that, but, again, the hearing is on the broader issues of ipos. we'll have another meeting as necessary. today's hearing is a cheering all point examing the procedures for taking companies public. this will be a productive hearing. when senator crapo arrives if he's able, i'll interrupt your statement and give them the opportunity for opening statement. let me now ask for your statements. first is dr. anne sherman, associate professor of finance at depaul university receiving ph.d. in economics from the university of minnesota. the research on the methods is published in top financial journalists, and she was consulted on the google ipo. she teaches finance at the university of wisconsin-madison, notre dame, and hong kong
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university of science and technology. all right. next witness is ms. liz byer. she's the founding principle of the organization providing stay teggic guidance, and ms. beyer has firsthand experience in investment banker of venture capitalist board member and internal coordinator analyst employee. previously, ms. beyer was director of business on thization where she was a chief architect in the company's ipo. next is joe h trotter, he's the gloanl co-chair of the public company representation practice group and deputy chair of the corporate department in the washington, d.c. office. he's focusing on capital markets transactions, acquisitions, mergers, and general corporate
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management. finally, the last witness is -- [inaudible] he is a senior animal cyst for a global financial service company and tireless advocate for up vesters specializing in shareholder rights, and he's research has been cited many times. thank you for being here. all of your testimonies are made part of the record in its entirety, and summarize it within five minutes. we begin with dr. sherman. >> chairman reed, thank you for inviting me to testify today. my research has been primarily on ipo methods in various countries, and in the last few decades, there's been a lot of experimentation in countries with the method. i want to make the main point that the u.s. method, commonly called book building, is thee most popular method around the planet, and it was not always that way. if you go back to the early
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1990s, it was used really only in the u.s. and some into canada. by the end of the 1990s, it was the dominant method, and it's become more popular since then. now, the difference between book building and other methods is with book building, the underwriter gets feedback from investors before setting the offer price. it's not always to get people to honestly tell you they like the offering if they know you use that information to raise the price. it's important that the underwriter controls allocations. who gets what? by controlling allocations, the underwriter can favor regular investors that don't try to cherry pick the hot offers and favor investors that give feedback to set the price which can help long term investors. there's reasons why the underwriter favors institutional investors. ordinary investors don't have the resources to play the same role in ipos.
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it doesn't mean they can't participate. if you look around the world, most countries open up the ipo process to all ordinary up vesters, but the key is they open up the allocations, but they do not control price setting. they don't have a chance for shares, and the most popular method outside the u.s. is a hybrid or combination where they have a tronch of book building and uses that to set the price and allocate institutional investors, and then for ordinary investors, they have a separate tranche. it's announced what is in each tranche, and everyone is allowed to order shares in the regional tranche, and if it's over subscribed, there's a lottery. it's open. it's transparent. everyone has a chance to get shares, but they are not just in the price setting process. that's a method that worked well
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all over the world. the method has not worked well around the world is to use an auction that's open to everyone, but everyone has an equal say in setting the price. i don't want to use up too much of the instruction time, but -- introductory time, but i'm happy to answer questions on that. the method is used in two dozen countries, and they all ended it because of huge problems. when i was doing literature searches for newspaper searches to find out about various ipo auctions, i learned good search terms were flock, disaster, debackble, calamity. the auction method is blown up in people's faces around the world which is why countries stopped using it. retail investors should be allowed to participate, but you have to be very careful about giving major roles in the price setting process. what should the u.s. do? frankly, i'm neutral on whether the u.s. should require the
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bigger role to investors, but i feel strongly if we're going to do that, it should be through the hybrid method with a separate tranche so everybody has an equal chance of getting shares, but it doesn't disrupt the price setting. last, on the role that small investors should play in private equity is the crowd funding where you have a website and a bunch of people put up a few hundred dollars each. i see two big problems with that. the first is who does the due diligence? the major problem with these is someone needs to screen the offerings before they get funding, and someone needs to continue to monitor them, and if we don't find a way to do that, crowd funding could be a disaster for investors. the second question is who will set the price? i hope i communicated that letting ordinary investors price ipos has been disastrous. if they are not good at pricing
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relatively sophisticated or advanced ipos, then there's even less reason to think they can price startups. again, thank you, and i'd be happy to answer questions. >> thank you very much, doctor. ms. beyer, please. >> thank you for inviting me. honored to submit my comem tear to important discussions of the ipo process which is a right of passage. having been an institutional player for aggregate individuals and investment banker, part of the team that designed a high profile ipo and board member of a company transitions from private to public and afterwards, i looked at the ipos process from a variety of perspective, and it's from there i offer comments today. ipos, as you mentioned, are always inherently very risky.
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riskier than investing in seasoned companies. looking at the class of 2012, the best performing ipo year-to-date was sinacore, difficult getting public, traded up 5% day one and now is at 162%. then there's sirus, warmly embraced in february, up 14% day one, currently down 31%, and then there's the higher profile spunk, up 109% on the day of its ipo, and today it's up 90% meaning those people who participated in fran cy of day -- frenzy of day one may be underwater although the stock doubled from the date of the initial offering. it's difficult to predict what any stock does on its i ipo. there's no right answer. there's always winners and losers. people who invest day one are
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speculators not investors. the importance here is for overseers to make sure that up front anyone who chooses to participate in an ipo fully consider not only the possible rewards, but also the very, very real risk. if i may make one suggestion here today, i would suggest that before confirming an order, be it phone or in person or online, every individual be asked to read or be read to acknowledge and confirm agreement with a very short simple goal statement along these lines. i fully acknowledge this stock has an equal stock of trading up or down for my purchase price, and i acknowledge the chairs of newly public companies routinely trade below the prices at which they are initially offered. my hope is that a cigarette box type warning of this nature could just in a moment of pause to transaction decisions too often based oven emotion and not on thoughtful analysis. with the remaining time, i add two other comments. first, as we know, some
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institutions have the chance to meet risk management with presentation and ask them question in a road show. clearly, it's not possible for individuals to have that same disclosure, although, with the retail road show, they now have the chance to watch the presentation, although i suspect most don't. i wonder if there's a chance to level the playing field by adding or suggesting to companies going public that they add a new or they offer an hour of q&a, online q&a for individual investors to respond to questions to any investor who actually watched the road show for a chance to level the playing field. a third comment echoes what you said. i have significant concerns about many provisions of the intentions of the passed jobs act as these provisions reduce transparency and roll back important investor protections.
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i suggest that agent needs re-- act needs refinement. the initial presentation that dr. sheman addressed, allocation, based on years of watching ipos, it needs to be in the hands of professionals with a fiduciary obligation, the management of the company selling stock, and the investment bankers who have the best aggregated information about the market and interest in the particular security. i do not think it's appropriate for retails to be able to set price in ipos. in summary, i think generally, the process works well for companies and informed, and i underline informed investors. i recommend ones we add a request of acknowledgement of risk to the perhaps management teams' q&a session, and, three, we revisit provisions of the job act. thank you very much. >> thank you. >> thank you, chairman, and
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thanks also to ranking member crapo and other members of the subcommittee and their staff. i provided you with details and information in the written testimony. i want to highlight four key areas to bear emphasis. first, the national importance of the ipo markets, bedrock principle of the system of federal regulation, and third, another bedrock principle, the concept of materiality in that disclosure, and i want to comebt comnt on the nature of risk, reward, and capital formation. the first point i'd like to make is that ipos compete with other forms of capital formation. emerging risk companies have two alternative paths for providing liquidity to the early stage investors. pursue an ipo or pursue the sale of a company. an inhospitable ipo environment sends more early stage companies towards sale process away from
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the ipo alternative. that's what we've seen in recent years. this matters a lot because ipos played an important role in fostering innovation and job growth. adds president obama said when he signed the job acts into law, new businesses for all account for every new job created in america and going public is a major step in expanding and hiring more workers for those companies. the ipo onramp entitled the jobs act as an important step in making it easier to go public maintaining important investor protections and providing significant cost savings in the ipo process. the second point i'd like to address is what else we can do to help ipos. we can return to bedrock principles of federal securities regulation. from the beginning, congressman dated a disclosure regime rather than mart -- merit regulation. an antedote to contrast
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disclosure with merit regulation. john is well-known for a distinguished career and distinguished service as director of the fcc's division of corporation and finance. a disclosure regulator. earlier in his career, he worked for a state securities commission, a merit regulator. his co-workers at the commission proudly refused to approve the shares of an untested upstart company whose name today everyone in the room would recognize. they rejected the company's request to sell shares in their state because the ceo's compensation was too high. what was the ipo price john asked? answer? $22 per share. well, john responded to the colleagues the stock is now trading at $60 per share. how did we help investors in the state by preventing them from buying at $22? that antedote sums up merit regulation and highlights the
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disclosure regimes letting up vesters choose winners and losers. third point i want to make is about disclosure, and what information companies must provide to investors in a regime that takes the path of disclosure rather than merit regulation. tried and true answer to that question is that disclosure of all information that is material is required. well, anyone who looked in an ipo perspective recently may wonder if we have gone far from the central principle of disclose or material information. ipo perspective today is a detailed document running as much as 200 pages or more. awesome. it may be filled with wit, but it's hardly the hallmark of an ipo perspective. balanced and reasonable approach to materiality is critical to the success of any disclosure based regulatory regime. an avalanche of trivial information obscures truly important information and does nothing to increase the
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protection of investors. my last point is about risk. it's a simple fact of economic life that not all ip porks s succeed. any commercial enterprise who earns a process can have a loss. any public company may or may not make company for investors, and the cover page of every ipo perspective today says this is our initial public offering, no market currently exists for our shares. the perspective has many pages of detailed risk factors highlighting risks relating to the company and the offering. in addition to transparency, our capital markets must offer investors the opportunity to take risk. risk free capital markets have new future as the commissioner daniel gallager said. if if we can create risk free markets, he said, it does not
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attract companies or investors because investors would do just as well putting money in savingsing thes or treasury builds. thank you very much. >> thank you. >> mr. chairman and members of the committee, i want to thank you for the opportunity to offer testimony and recommendations today. i'm a senior analyst for the motley fool with the purpose of helping the world invest better. millions of individual investors rely on the motley fool for guidance on managing money and advocate for the directive shareholders. for years, we worked to create a level playing field in the market. for this reason that we are eager and grateful to suggest whether the ipo process is working for ordinary investors. it goes without saying ipos are critical to developing markets, helping businesses raise capital they need to grow and hire.
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from our vantage point, the overarching problem with ipos is there's an imbalance of information access. issuers in adventure capitalist depend on us for capital and liquidity, the deck is stacked against us in two major ways. first, insiders, underwriters, and their favorite clients have access to more and better information than ordinary investors. this gives them and the data champs the ability to manage their value. according to facebook's recent ipo provided a prom innocent example of this. second, there's an equal axis to shares. offering are limited to preferred clients of underwriters, and by the time we buy shares, there's a significant markup. it's estimated from 1990 to 2009, the first average was 22% totallying $124 billion. it didn't go to the companies going public, but their friends. and other clients of the
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underwriters. unfortunately, ipo process is likely to get worse for individual investors as a result of the recently passed jobs act. the section of the act is intended to spur economic growth and what the company has to meet in order to go public. reporting requirements gives less information to up vesters and a quality pool of ipos. when we lost faith in the quality of ipos in the late 1990s, volume crashed 75% in 2001. it's worth pointing out that ipos doubled from that level following the research settlement and passing of sarbanes-oxley addressing some of the dot-com bubble in recent years. nine out of ten companies go public, and to remedy the problems, objective should be to level the playing field and
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recover the process by maximizing transparency and disclosure. three recommendations. first, extend the application and enforcement of fair disclosure in the beginning of the ipo process to improve flow of information to all investors reducing one of the most preventable information age symmetries between underwriters and favorite clients versus favorite investors. second, require companies and underwriters to have the initial offering in an efficient manner. companies like google and interactive brockers played variations on an auction process giving investors the opportunity to participate in buying shares at the same price under the plan of distribution. the added benefit is that it lowers the cost of going public for companies by more than half. finally, fix the most troubling portion of the jobs act in the
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retailers' perspective. there's a number of improvements to be made, but here's the two most straightforward. decrease the size threshold in the definition in order to increase the amount of information available to investors as previously recommended. the current definition encompasses all ipos. have a lockup period that extends from the offering to at least 180 days after an issuer is subject to normal reporting requirements. similar to common practice before passage of the jobs act. this better aligns the ordinary investors and also help to ensure any raise, via the exemption, for its intended purpose by flowing to the company and not to insiders exits on the ipo on-ramp. as the process stands, ordinary investors have unequal access to
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information and the market. we're asking for a level playing field, disclosure, and trans-- transparency. i'm happy to answer any questions. >> thank you, all, very much for that very excellent testimony. both your written testimonies and comments this morning. i'll begin with a question for the whole panel focusing on the issue of how do we best protect the retail investor in the model with variations now because of the jobs agent, is the book building with, you know, managers of the ipo with clients and as a theory in order to advance price discovery, induct all of these road shows, ect.,
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but as the facebook ipo suggested, there's critical information, particularly, the very last minute, was available to favorite investors and not -- why not to the public? i just want your thoughts, each one of you. you know, if we are going to involve retail investors, how do we do it so they are confident and continue to invest in ipos. dr. sherman? >> it's important to level the playing field in terms of information, and i was very surprised with these. analysts were allowed to talk to institutions, but not individuals. i can see why that's there because individuals are allowed to tab given the forecast. it's not hard information, but expectations of the future. individuals might not understand that these are speculative, and
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they might not be able to appreciate it, but i think the same information should be available to everyone. one of the unusual things about the u.s. is the quiet period regulation and as was said disclosure and not merit. it's important we try to give everyone the same access to information, and i would say the q&a from the road show should be available even to retail. >> just to follow up, under the jobs act, there's a loosening of the roles, and unlike the universal settlement, there now can be sort of a compensate or relief. it's not the strict wall between the analysts and the promoters. is that accurate from your reading of it?
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>> well -- >> if you don't know, that's fine. >> i don't know. >> just by your comments and general question. >> on the follow-up question or whole question? >> whole question. >> on the whole question. number one, individuals do have the ability to participate in ipos through mutual funds. the clients we keep talking about are really those big firms that aggregated thousands of investments. firefighters and teacher can participate in ipos through the screen of a professional investor. the equal distribution of information is difficult. i understand this is not about facebook, but let's remember that everyone had access two days, and general motors pulled advertising off. that was a huge material piece of information that didn't seem to, in any way, handle the enthusiasm. there's morgan stanley's estimate offered to the clients who paid them. the estimate is a product that morgan stanley sells to its
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customers, and i don't know that we ought to be regulating what information customers can share with their or the clients, and it's a slippery slope, and if we incest -- insist all banks give information to everyone, what's the estimates? the jobs act issue i find of greatest concern and you mentioned the global research settlement that many banks are held bond by that so the analysts of the banks who have the most information about potential ipo are still restricted from talking. the only ones who can public research are those further away from what is actually happening, and i'm not sure that serving anyone's purpose. >> okay. mr. trotter? >> as i indicated in the written testimony, i'm not in a position to talk about a particular ipo or company, but i will say in the area of analyst research
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that i point all protections in the last decade remain unchanged as a result of the jobs act. there were some changes, and many. -- and many of the changes relate to the area that need to be implemented through other interpretations by the regulators in that area. >> with respect to the global analyst research settlement, yes, that's my understanding as well. one concern with the changes made in the jobs act is that if you allow analysts to meet with perspective clients, that there's possibility you can have meeting clients -- meeting companies that want to become public, and that way underwriters can say, hey, here's our acknowledgement. write nice things about your company. you know, we'll give you a strong buyer.
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in the 1990s, companies were becoming public and they got good buy recommendations from analysts. with respect to facebook, i agree the problem is not the facebook. the problem is not that shares went down because that can happen in any ipo. i would just say that there is a problem with the information when reports from analysts are issued by analysts who have special access to management, they can get information that is not really available to investors and when you see something like facebook, there's a problem when you have multiple analysts from various underwriters who all got their estimates from pretty much the same number to pretty much the
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same number. you have reports that, you know, people from facebook may have indicated to them that they should go over their estimates, and meanwhile, the public gets sort of some big line in a massive s1 amendment about, you know, our subscribers are continuing to grow at a faster pace than our revenue so the quality of information that's being presented to respective clients of the underwriters just is not on the same level as the information that investors would have if they have to dig through the s1 and try to discern what that means. >> dr. sherman, you pointed out in other countries that the retail investors do not engage themselves in the price discovery and price setting. that is restricted to, and i presume from your comments that you feel that model is the appropriate way to set prices, but many countries have a specific tranche for retail
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investors in which they can buy basically the same price, and can you look at that in terms of our approach to ipos? >> i'd like to see it considered here, especially for larger offerings. i think with smaller offerings, i think a lot of the smaller ipos are marketed more to retail, but for larger offerings, and i contacted facebook, and i tried to talk them into ding this, so that way everybody has an equal chance to participate and when i lived in hong kong, i placed orders. you just needed a hong kong id number, and everybody had an equal chance. the problem with auctions is when you get retail investor demand that's uncertain, you get a flood of up vesters coming in, pushing prices up to unsustainable levels, and people lose money, and retails go away
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again because they are scared of the process. there needs to be coordination, and we can easily then open up allocations and give everyone the chance without disrupting the process which is not good for anyone. >> one of the american model or the better term is the road show in which analysts are able to quiz management as was suggested, and it might be appropriate to consider making that much more accessible. i think on facebook, there was a version put on that, and it was neglected to have the question of analysts, probably the most important part of the demonstration. is the road show process, you know, the best mechanism or -- in your view?
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>> i think it's important, and i would like to see the question and answer. if you look at why investors go to the road show, it's to see the management in action, see how to respond top tough questions, to get a fuel for the people -- feel for the people because you're not just investing in the product, but you're up vesting or betting on the management team, and facebook, their first day, and they placed the q&a with a 3-minute video, and investors were very unhappy about that, and by the next day in boston, that was gone because i watched the online road shows, but management is scripted and rehearsed, and some, it's just different to see them on feet responding to questions, and retail investors should get the chance to do that. >> thank you. mr. trotter, we got the jobs act now, and you suggested it's opening up new opportunities, but one opportunity to, has been
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suggested in reports by the "wall street journal," to take a shell company effectively. that is already registered presumably, and simply do some type -- you're the expert, on reverse merger and so you get -- you don't have to have -- in some cases audited cases or the rigorous sarbanes-oxley or the book building or analysis or offering. is that something that concerns you about how willingly or unwittingly this act could be used? >> mr. chairman, what you said about shell companies are, in fact, true. they were true before april 5th, 20 # 12, and they continue to be true today. the jobs act didn't change the dynamic of the shell companies. they have been part of the
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system and subject to reviews. before they register, they go through the type of review process where they have to provide disclosures to their investors. in terms of sarbanes-oxley compliance by shell companies, they almost exclusively are smaller reporter companies so they have already been exempted under dodd-frank from the internal control audit required by section 404b of sarbanes-oxley, and so none of those as sects relating to shell companies has changed as a result of the jobs act. >> but one ofs, and this could be the most ironic aspect of the jobs act, there's nothing in the bill that requires any creation of jobs to qualify for the protections of the jobs act. is that accurate? >> i think the premise underlining the ipo on-ramp is that, again, going back to the
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competitive nature of the capital formation process and the fact that if you have an early stage company, it needs to provide a return to the early investors who bet on the company when it was just an idea. that type of a company can pursue one of two paths. it can sell the company, an inquirer, and they can have redundant positions eliminated in the short term, or it can raise its own capital to be independent, and in raising your own capital to become independent enterprise, you're going to grow the business, and when you do that, you need more employees to help your run your growing business, and so you're going to need to hire people, and, in fact, you can think of cities around our nation that are almost anonymous with certain major companies today, and yet those, almost every case, they started out as struggling enterprises that nobody would have guessed would have become household name companies today, and so you think about the connection between ipos and job creation,
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you can just pick your favorite city whether it's seattle or austin, texas, and you think of a company that's changed the landscape of that city. >> but physically, all of the provisions of the jobs act can be accessed by companies who do not grow one additional jobs? they can avoid sarbanes-oxley reporting? they can do this until they get to the size of $1 billion in revenue which seems to me a company with $1 billion in revenue can afford to have audit standards and afford other things which would protect whatever their shareholders, but the reality is that you don't have to have one extra job to be an emerging growth company; is that correct? >> yes, sir. several appointments in response -- points in response to your very good questions there. the profit and loss system of
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the markets in our free enterprise system intends for profit and loss. we can want -- this goes -- we cannot -- this goes back to regulation versus disclosure and now in mind -- hindsight, they talk about dot-coms and how they are examples of bad ideas. nobody knew at the outset whether they were bad ideas. the investors had to choose and pick winners and losers, and some of the companies are long forgotten, but many are around today creating new industries changing the way we purchase products so that's one thought. another one on the issues of sarbanes-oxley compliance, remember the president's jobs council headed by general electric recommended a permanent exemption from sarbanes-oxley 404b compliance, the internal
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alint station in sarbanes-oxley for all companies below a billion dollars in revenue. the jobs act provision that gives the on-ramp of one to five years, depending on the size of the company, is much more limited than that recommendation from the president's jobs council. any company has two years under prior law before they have to comply. it is changing internal controls at that station. >> one could argue isn't the 2 #-year exemption for all companies before the jobs act a requirement to eliminate that for the initial public offering and the two succeeding years might have been a little bit more, you know, generous than was necessary. do we already recognize in sarbanes-oxley that companies coming online, you know, may not be as well prepared.
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comments all the way around. >> well, with regards to the jobs act, you're referring, i believe, to some of the reporting in the "wall street journal" about the jobs act, jobs free companies, and as well as other articles describing lots of companies describing themselves whose blank check companies or trusts, and there's a quote in the article, actually, from the nasdaq vice chairman who says i don't think anyone was thinking this would be applied to reverse mergers and the like, and i guess i would say that we should be very careful about what the emerging growth company exemptions are being used for. we've seen, you know, trouble in china, for example, with their reverse merger disaster. you know, we had reporting in china and the accounting
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standards in china are just not at the same level as ours are, and we thought when investors very suddenly realized this, recently acted on this, starting in late 2010, you know, shares of 93% of these companies fell. you know, it was by an average of 50% for chinese emerging growth companies, and any of them that wanted to raise capital after that point became very difficult to do that. you know, if companies that are presumably growing at, you know, 50% or 60% a year with a pe of 2, and, i mean, the only reason that happens is if people just believe that they can't trust any of the numbers coming out of china. you're investing in a small chinese company right now, the first risk factor you consider is whether or not it's a fraud. i would just say that we should be very careful about how we don't want to move in that direction is all i'm saying. >> let me just, mr. trotter,
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this issue you brought up with merit regulation, which is my understanding is on the federal securities, there's not merit regulation; is that correct? >> that's correct, mr. chairman. it's a matter of degree. when you require, for example -- there are instances where disclosure can veer into merit regulation depending on whether the requirement is simply to provide all investors with all material information about the company. that's pure disclosure. requiring specific disclosure about specific topics that -- or requiring companies to comply with substantive standards that are not simply about disclosing to investors all of their material information, then you veer into merit regulation. >> well, my understanding, and, again, it might be outdated, is
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that the fcc cannot refuse a registration because they object to the business model or anything else. just spell it out in excruciating detail. that's not merit regulation. it's saying the fight is against merit regulation and disclosure. i'm for disclosure. we don't have merit regulation. dr. sherman, do we have regulation for securities laws? >> no. it's important, particularly in asia, they give investors much less information and instead rely on the profits from the company over the last three years, and if not, you can't go public. that closes out a lot of good companies, but yet improves prices because people don't have the information to judge. the strength of the u.s. is we
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have disclosure and not merit. >> and because of that, there is a strong emphasis on very thorough disclosure, and as mr. trotter points out, it leads to long perspectives, but my feeling, and i'll ask you and ms. buyer, the perspectives are read closely by very sophisticated investors and the information is not just gratuitous or ignored, and if i was presented 200 pages i would quickly, evelyn wood would be proud of me, but when you have these road shows, when you have the process of reiteration that prospectuses are assumed. >> you get more information with a company's ipo than at any
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other time. there's so much in the prospectus. you go through the risk factors and stories in extra detail and you find out how the company does business, how the model works from all that disclosure. you don't have to read all of it, but you can look through it and find what you need and hopefully it's there. it's there, and i hate to see us lose that. >> ms. buyer, your comments. >> you read the prospectus cover to cover prior to meeting with the company to be able to use meeting time most effectively. there's a tremendous amount of information available, and, yes, it's written sometimes in arcane form, but it's tremendously important and it brings about a question about the jobs act, and, of course, people now -- investors have less time to study the prospectus knowing it can be filed confidently. >> what's your reaction to the confidential filing? how does that impact an
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institutional investor like you who is, you know, wants to invest, perhaps, but also, you know, theoretically is helping to find the right price because you have all of these details, what effect does that have practiceically on you? >> mostly, institutional investors read the prospectus in its final form. for the most part, the can confidential filing doesn't much matter, however, from time to time, it differs from the final filing thanks to the fcc and up vesters learn a great deal in watching changes like groupon that sufferedded from the initial s1 # and the final s1 when they learned the relationship with the accounting rules were flexible. that knowledge, watching that process, was very valuable to institutional and retail investors. >> it strikes me, again, you know, we have a system which is
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based on transparency, disclosure, basic economic theory which is perfect information which drives competitive markets, and here we have basically said this is all going to be confidential until very late in the process, ect., and i don't see how that accomplished significantly informing retail investors. >> i wouldn't -- i would agree with you, and i would further comment that by allowing them to keep those facts hidden until later in the process while concurrently encouraging research provisions that allow research during that period, were actually asking investors to make decisions based on opinion opposed to the facts they could have had. it's exactly flipped. your insight, i believe, should be in play. >> i know you have a position on this.
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>> well, i guess what i would say, the confidential submission is based on a project from the fcc for core and private issuers, and the genesis of the idea, unlike the case of foreign and private issuers, they are required to provide the original submission plus all amendments resulting from the fcc review process approximately a month before the ipo is priced. all the information referred to is publicly available in sequence and investors have a month to pour over all of that information. >> let me ask you another question because there's the presumption that the jobs act has been -- proponents reducing cost, and, in fact, estimates, i think are 30%-50% of the course. i think that's been what you were suggesting in your testimony. where are the cost savings coming from?
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banking fees you believe would be lower because there's not the requirement to do the elaborate road shows?çó is it because information -- where are the savings coming from? >> principally from two sources. it's based on surveys, pre and post ipos who responded to the proposals and provided estimates on how much cost savings they would recognize. first would be the deferral of the sarbanes-oxley internal control audit requirement, which again for companies of this size, the president's jobs council recommended a permanent exemption, and then from the disscaled disclosure system that the fcc had for other companies, and in the case of -- you asked about merit regulation versus disclosure, if you think about disclosures requiredded of large
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enterprises, and applying the disclosure requirements to much smaller enterprises, and i think it's worth noting that all of the companies captured within the definition of an emerging growth company capture 3%, and so there's a concerned expressed -- concern expressedded by fellow witnesses here that bar the definition is too broad, but i think you have to take into account that that definition captures roughly 3% of the total market capitalization of the united states. that's not a very large number. >> this is one of those issues that just depends on what you measure and compare it to. mr. mocowitz, having a billion dollars in revenue capture